Air Canada has completed a private offering of $400 million of 7.75% senior unsecured notes due in 2021.
The Montreal-based carrier received C$432 milion in net proceeds for sale of the notes, which were sold at par with interest payments occurring semi-annually.
"The successful completion of our unsecured note offering is another significant transformational event for Air Canada as we enter a new phase of capital investment in our fleet and product," says Calin Rovinescu, the airline’s president and chief executive.
“I was especially pleased with the offering's reception. The capital markets have demonstrated their confidence in Air Canada by extending us credit on an unsecured basis on competitive terms, recognising, among other things, Air Canada's improved leverage ratios, credit ratings and profitability, as well as the elimination of the pension deficit overhang.”
The airline plans to use the proceeds of the debt to boost cash balances and fund capital expenditures, according to rating agencies.