Air Canada finalises US$2.15 billion senior secured credit facilities

Air Canada has announced the completion of its US$2.15 billion senior secured credit facilities. These facilities comprise a US$1.175 billion term loan B maturing in 2031 (the Term Loan) and a US$975 million revolving credit facility maturing in 2029 (the Revolving Facility). This collective arrangement forms the “Senior Credit Facilities”.

Proceeds from the Term Loan, alongside US$1.09 billion from Air Canada’s balance sheet, are earmarked to refinance all outstanding indebtedness under its existing US$2.265 billion term loan B maturing in 2028. The Revolving Facility, an extension and increase from Air Canada’s prior US$600 million revolving credit facility maturing in 2025, remains undrawn as of the date of this announcement. Any future borrowings under the Revolving Facility will be directed towards funding working capital and general corporate needs of Air Canada and its subsidiaries. Concurrently, Air Canada terminated its undrawn CA$200 million revolving credit facility maturing in 2026.

Key highlights of the closing include a significant reduction of US$1.09 billion in Air Canada’s outstanding senior secured indebtedness, lower interest rates on term loan B borrowings set at 250 basis points over SOFR (with no SOFR floor, no spread adjustment), and an increase in available undrawn amounts under the Revolving Facility by US$375 million.

Under the Senior Credit Facilities, Air Canada’s obligations are senior secured and backed on a first-lien basis by certain collateral, including a substantial portion of its international routes, airport slots, and gate leaseholds, subject to specified liens and exceptions. (£1.00 = US$1.27 / CA$1.72 at time of publication).