On July 29, 2009, Air Canada entered into a financing agreement with GE Canada Finance Holding Company, Export Development Canada, Aeroplan Canada and ACE Aviation Holdings as lenders. GE Finance is acting as Administrative Agent and GE Capital Markets Inc. and GE Capital Markets (Canada) Ltd. are acting as arrangers. The secured financing extends a term credit facility of up to $700 million (the Credit Agreement) on commercial terms to Air Canada for the purpose of refinancing certain debt and to provide funding for working capital and other general corporate purposes.
An initial drawdown of $600 million is available to Air Canada under the Credit Agreement upon satisfaction of certain conditions. On or before the first anniversary and subject to satisfaction of certain conditions, Air Canada may request the increase of the facility by up to an additional $100 million by obtaining new commitments. Amounts drawn under the Credit Agreement bear interest at a minimum annual rate of 12.75%.
The initial $600 million to be drawn under the Credit Agreement is repayable, starting August 1, 2010, in equal consecutive quarterly installments of $30 million with a final payment of $120 million due by the fifth anniversary of the initial drawdown. Any increase to the facility would increase, on a pro rata basis, the scheduled repayments, including the final payment.
