Air Canada INC (OTCMKTS:AIDIF): Announces Closure of Notes Offering

Canada’s leading carrier Air Canada INC (TSE:AC.B; OTCMKTS:AIDIF) mentioned the closure of its private offerings of senior secured notes consisting of $400 million, 6.75% senior secured notes due 2019, $300 million, 8.75% senior secured notes due 2020 and CDN 300 million, 7.625% notes due 2019.

Air Canada INC (OTCMKTS:AIDIF) also mentioned the completion of the closing of its previous $400 million new senior secured credit facility. This senior secured credit facility was comprised of $300 million term-loan maturing in 2019 and additional $100 million revolving credit facility. However the company mentioned that the revolving credit facility wasn’t drawn in connection to the closing.

Air Canada INC (OTCMKTS:AIDIF)’s total net proceeds from the sale of new senior notes and term-loan borrowings is estimated to be around CDN 1,300 million.

The company has applied a portion of this net proceeds and credit facility to purchase all its outstanding senior secured notes due 2015 and 2016. These include Air Canada’s 9.25% senior secured notes and 10.125% senior secured notes due 2015 as well as 12.00% senior second notes due 2016 that were tendered in connection with the previously announced tender offers commenced on September 5, 2013.

The company added that the remaining portion of the net proceeds and borrowings will be used to purchase or redeem any of the existing notes not tendered prior to the early deadline. The remaining net proceeds, then after will be used for general corporate purposes.

In another note, the US aerospace and defense contractor AAR (NYSE: AIR) mentioned today that as a part of the multiyear agreement to perform maintenance repair and overhaul at the company’s Duluth repair station, it has ramped up the maintenance to support Air Canada INC (OTCMKTS:AIDIF)’s fleet of commercial aircraft.

To mention, based on an industry survey by Aviation Week, AAR has been ranked the No. 1 Airframe MRO Provider in North America.

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