Air Canada raises $1.23 billion more in financing to deal with impact of COVID-19 - InfoNews

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Air Canada raises $1.23 billion more in financing to deal with impact of COVID-19

An Air Canada worker clean her ticketing station at Pearson International Airport in Toronto on Wednesday, April 8, 2020. Air Canada raised an additional $1.23 billion in financing to help offset the challenges of dealing with COVID-19, raising the total to $5.5 billion since the pandemic struck in mid-March. THE CANADIAN PRESS/Nathan Denette
June 22, 2020 - 3:59 PM

MONTREAL - Air Canada has raised an additional $1.23 billion in financing to help offset the challenges of dealing with COVID-19, bringing its total to $5.5 billion since the pandemic struck in mid-March.

The Montreal-based airline says it received $823 million in proceeds from second-lien secured notes and US$300 million from Class C pass-through certificates.

The private offering of notes due 2024 with nine per cent interest completed Monday was secured by certain real estate interests, ground service equipment, certain airport slots and gate leaseholds.

Air Canada also says it completed a private offering earlier in June of one tranche of EETCs with a face amount of about US$315 million and an interest rate of 10.5 per cent.

Treasurer Pierre Houle says the fact that Air Canada was able to add $1.23 billion to its liquidity without using any unencumbered assets "leaves the airline in an excellent position to access additional funds should the need arise."

The airline has also reduced costs through workforce reductions, a $1.1 billion cost transformation program, and capacity and network rationalization.

It expects to end the second quarter with at least $9 billion in liquidity.

"Air Canada's strong relative position has allowed us to navigate through this crisis and we have full confidence that we will be successful in maintaining liquidity at levels more than sufficient to meet the challenges and take advantage of the opportunities ahead," Houle says in a news release.

This report by The Canadian Press was first published June 22, 2020.

Companies in this story: (TSX:AC)

News from © The Canadian Press, 2020
The Canadian Press

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