Air Canada completes closing of Senior Secured Credit Facilities

Friday, March 22, 2024

Air Canada announced today that it has completed the closing of U.S.$2.15 billion senior secured credit facilities, comprised of (i) a U.S.$1.175 billion term loan B maturing in 2031 (the “Term Loan”) and (ii) a U.S.$975 million revolving credit facility maturing in 2029 (the “Revolving Facility” and, together with the “Term Loan”, the “Senior Credit Facilities”).

The aggregate gross proceeds of the Term Loan, together with cash from Air Canada balance sheet of U.S.$1.09 billion, are being applied to refinance all of Air Canada’s indebtedness outstanding under its existing U.S.$2.265 billion term loan B maturing in 2028.

The Revolving Facility, which is the result of an upsize and extension of Air Canada’s existing U.S.$600 million revolving credit facility previously maturing in 2025, is undrawn as of the date hereof, and any future borrowings thereunder would be intended to fund working capital and other general corporate purposes of Air Canada and its subsidiaries.

Concurrently with the closing of the Senior Credit Facilities, Air Canada also terminated its undrawn C$200 million revolving credit facility maturing in 2026.

Key highlights of the closing of Senior Credit Facilities include:

significantly reducing Air Canada’s outstanding senior secured indebtedness by U.S.$1.09 billion; reducing Air Canada’s interest rate on its term loan B borrowings, to 250 basis points over SOFR (with no SOFR floor, no spread adjustment); and increasing available undrawn amounts under the Revolving Facility by U.S.$375 million.

Air Canada’s obligations under the Senior Credit Facilities are senior secured obligations of Air Canada, secured on a first-lien basis, subject to certain permitted liens and exclusions, by certain collateral comprised of substantially all of Air Canada’s international routes, airport slots and gate leaseholds.

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