Ottawa International Airport seeks consents to waive rate covenant, additional restrictions until 2023

By Rebecca Melvin

Concord, N.H., April 7 – Ottawa International Airport Authority is seeking consent from its bondholders to temporarily waive certain provisions under the master trust indenture governing its outstanding bond series, including pledged bonds, according to a press release.

The proposed amendments seek waivers until Dec. 31, 2022 of the rate covenant, the additional indebtedness covenant and restrictions on sale, lease, etc. covenants in the indenture.

The OIAA has commenced the solicitation of consents and proxies regarding the proposed amendments, and a bondholder conference call has been scheduled for 10 a.m. ET on April 27. The record date for determining bondholders entitled to vote and consent is April 7.

The extraordinary resolution regarding the proposed amendments must be approved by at least 66⅔% of the votes of the bondholders present or represented by proxy at the meeting.

The master trust indenture also provides that the resolution may be passed by the written consent of bondholders holding at least 66⅔% of the outstanding principal amount of all outstanding bonds. If bondholders representing at least 66⅔% of the outstanding principal amount of all outstanding bonds have delivered valid proxy and consent forms in favor of the resolution by 5 p.m. ET on April 23, the resolution will be passed by the written consent of the bondholders and the meeting will be canceled.

Bondholders who submit a valid proxy and consent form prior to the cut-off time or vote by proxy at the meeting if a meeting is held will receive a voting fee of C$1.00 for each C$1,000 outstanding principal amount of bonds subject to certain conditions being satisfied.

“Like the rest of the aviation industry, the OIAA, has faced a devastating decline in passenger volumes caused by travel restrictions intended to contain the spread of Covid-19. Additionally, other related economic conditions have worsened, further impacting the OIAA and other industry participants. As an infrastructure entity deemed critical, the airport is required to remain open and operational. Since the beginning of the pandemic, OIAA has taken swift and decisive action to cut capital and operating costs, consolidate operations, and adjust its workforce in an effort to reduce the financial impact of the pandemic, while adapting to all public health requirements to keep employees and passengers safe,” according to the press release.

Though OIAA experienced a significant cash flow reduction in 2020 and is forecasting a significant reduction in 2021 and 2022 due to lower passenger volume and uncertainty with respect to the pace of recovery in passenger traffic, OIAA expects to meet its payment obligations on the bonds as they come due. The waiver avoids triggering an event of default under the master trust indenture where that default would occur due to events outside OIAA's control and would add more cost and complexity to bondholders.

CIBC World Markets Inc. is acting as solicitation agent and D.F. King Canada (800 239-6513, 416 682-3825, inquiries@dfking.com) is acting as information agent in connection with the meeting and consent solicitation. AST Trust Co. (Canada) is acting as tabulation agent. Norton Rose Fulbright Canada LLP is acting as legal adviser to OIAA.

Ottawa, Ont.-based Airport Authority oversees the business of the airport.

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