Air Canada prices Canadian dollar private EETC offering

Eleanor Steed
By Eleanor Steed March 7, 2018 16:19

Air Canada prices Canadian dollar private EETC offering

Air Canada priced a private offering of two tranches of enhanced equipment trust certificates (EETCs) denominated in Canadian dollars. The two tranches of Certificates, which have been rated, have a combined aggregate face amount of approximately $301 million and a weighted average interest rate of 3.76%.

The Class A certificates will have an interest rate of 3.67% per annum and the Class B certificates will have an interest rate of 4.19% per annum.

“This Canadian dollar private offering of Enhanced Equipment Trust Certificates has terms and conditions comparable to our U.S. dollar 2017-1 Series EETC transaction,” said Michael Rousseau, Executive Vice President and Chief Financial Officer. “Our ability to conclude an EETC transaction in Canadian dollars is an important development for us as it represents new opportunities for future aircraft financings and contributes to lowering the overall cost of debt and risk profile of the company.”

Each class of Certificates will represent an interest in a related pass through trust. The trusts will use the proceeds from the offering to acquire equipment notes to be issued by Air Canada and secured by one new Boeing 787-9 aircraft and four new Boeing 737 MAX-8 aircraft, which are scheduled for delivery in April and May 2018. The security interest in each of the aircraft will benefit from the protections of the Cape Town Convention on International Interests in Mobile Equipment and the Protocol thereto on Matters Specific to Aircraft Equipment, as enacted in Canada. Air Canada will use the proceeds from the sale of the equipment notes to finance the acquisition of these new aircraft.

Eleanor Steed
By Eleanor Steed March 7, 2018 16:19