Air Canada uses C$1.25b refinancing to lighten debt load by $355m and trim annual interest payments
Air Canada took a series of steps Monday that will reduce its debt by C$355m and cut its annual interest payments by $60m. Under the airline’s $1.25b refinancing plan, it will sell $200m worth of senior notes at 4.75%, due in 2023. It also secured commitments for a US$800m term loan and a US$300m revolving credit facility. Air Canada will use the proceeds of the debt sale, together with the term loan and $444m of cash to pay off all its outstanding senior secured notes as well as an outstanding US$300m term loan. Together, these transactions will reduce the company’s average cost of debt by 150 basis points to 4.49%. It will also increase the airline’s unencumbered assets by $650m to approximately $2b. Air Canada’s goal is to cut its unit costs by 21% by the end of 2018 compared to 2012 levels. <br/>
https://portal.staralliance.com/cms/news/hot-topics/2016-09-27/star/air-canada-uses-c-1-25b-refinancing-to-lighten-debt-load-by-355m-and-trim-annual-interest-payments
https://portal.staralliance.com/cms/logo.png
Air Canada uses C$1.25b refinancing to lighten debt load by $355m and trim annual interest payments
Air Canada took a series of steps Monday that will reduce its debt by C$355m and cut its annual interest payments by $60m. Under the airline’s $1.25b refinancing plan, it will sell $200m worth of senior notes at 4.75%, due in 2023. It also secured commitments for a US$800m term loan and a US$300m revolving credit facility. Air Canada will use the proceeds of the debt sale, together with the term loan and $444m of cash to pay off all its outstanding senior secured notes as well as an outstanding US$300m term loan. Together, these transactions will reduce the company’s average cost of debt by 150 basis points to 4.49%. It will also increase the airline’s unencumbered assets by $650m to approximately $2b. Air Canada’s goal is to cut its unit costs by 21% by the end of 2018 compared to 2012 levels. <br/>
