Air Canada has launched a cash tender and plans to refinance $1.09 billion in outstanding debt, as it seeks to extend its debt maturities and reduce interest rate costs.
The concurrent transactions include a cash tender premium of up to $97.50 for every $1,000 in outstanding debt for holders of its 9.25% senior secured notes due 2015, 10.125% senior secured notes due 2015 and 12% senior second lien due 2016, as well as an $800 million private placement refinancing of the notes.
Montreal-based Air Canada is offering $1,014 plus a $30 early tender premium for the 9.25% notes, Canadian dollar (C$) 1,018.57 ($979.58) plus a C$30 early tender premium for the 10.125% notes and $1,067.50 plus a $30 early tender premium for the 12% notes.
The early tenders are due by 18 September and remaining tenders by 2 October.
There is $600 million outstanding under the 9.25% notes, C$300 million under the 10.125% notes and $200 million under the 12% notes.
The refinancing is split between a $700 million senior secured term loan and a $100 million revolving credit facility. Proceeds would be used to repay any outstanding principal of the three issues.
Air Canada also plans to raise C$300 million in new senior secured notes and $300 million in new senior second lien notes through private placements.