Air Canada launches $1.1b debt buy back

Washington DC
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Air Canada has launched a cash tender to buy back nearly $1.1 billion in outstanding high interest debt.

The tender covers the Canadian flag carrier's 9.25% senior secured notes due 2015 with $600 million outstanding, 10.125% senior secured notes due 2015 with Canadian dollar (C$) 300 million ($295 million) outstanding and 12% senior second lien notes due 2016 with $200 million outstanding.

Air Canada is seeking to release the collateral that secures the notes with the tender.

The airline is offering $1,020.70 for every $1,000 in debt of the 9.25% notes, C$1,025.25 for every C$1,000 of the 10.125% notes and $1,067.20 for every $1,000 of the 12% notes. The tender closes on 12 July.

Air Canada is also offering an early tender premium of $30 for the US dollar denominated debt and C$30 for the Canadian dollar debt with a deadline of 27 June.

The carrier had C$3.25 billion in long-term debt and finance leases at the end of the first quarter.