Aeroports de Montreal seeks consents to amend master trust indenture

By Rebecca Melvin

New York, March 2 – ADM Aeroports de Montreal has commenced a solicitation of its bondholders to waive certain provisions of its master trust indenture temporarily, according to a company news release.

The proposed amendments are aimed at enabling the company to navigate the negative impact on its business and results of operations resulting from the Covid-19 pandemic. The indenture governs the issuer’s outstanding bond series, including pledged bonds.

The changes will reduce the possibility of triggering an event of default under the indenture, enable ADM to obtain additional financing and provide ADM with flexibility to operate its business and navigate through the challenges created by the Covid-19 pandemic, the release said.

ADM will be relieved of its obligations to meet or satisfy the rate covenant requirement in the indenture when tested based on each of the 2021 and 2022 fiscal years of ADM and meet or satisfy the rate covenant requirement in the indenture generally or on a pro forma basis when taking certain restricted actions under the additional indebtedness covenant and/or restrictions on sale, lease, etc. covenant in the indenture in each of the 2021 and 2022 fiscal years. More specifically, the proposed amendments seek waivers until Dec. 31, 2022 of the rate covenant, the additional indebtedness covenant and the restriction on sale, lease, etc. covenant.

AMD said that like the global aviation industry overall it has faced a severe and abrupt decline in air traffic due to the pandemic and travel restrictions. Reduced passenger and flight activity has hurt the companies. While ADM has implemented significant cash flow reduction in 2020 and is forecasting a significant cash flow reduction in 2021 and 2022 due to lower passenger volume and uncertainty regarding the pace of passenger traffic recovery, ADM expects to meet its payment obligations on bonds as they come due.

A bondholder teleconference regarding the amendments has been scheduled for 11 a.m. ET on March 19. The record date for determining bondholders entitled to vote and consent was March 1.

The extraordinary resolution must be approved by at least 66 2/3% of the votes of those bondholders present or represented by proxy at the meeting.

The indenture also provides that the resolution may be passed by written consent of bondholders holding at least 66 2/3% of the principal amount of all outstanding bonds. These must be delivered by 5 a.m. ET on March 17, and if the required consent is acquired, the teleconference will be canceled.

The company is paying a voting fee equal to C$1.00 for each C$1,000 of outstanding principal amount of the bonds as of the Record Date, including the outstanding borrowings secured by the pledged bonds, if a valid proxy and consent form is received and not revoked by the cut-off date.

CIBC Capital Markets and National Bank Financial Markets have been retained as joint solicitation agents, and AST Trust Co. (Canada) is acting as tabulation agent and D.F. King Canada (800-240-4118; 416-682-3825) is acting as information agent.

Aeroports de Montreal is an airport authority that manages, operates and develops the Montreal-Trudeau and Montreal-Mirabel international airports.

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