Air Canada Announces Pricing of Private Offering of Enhanced Equipment Trust Certificates

MONTREAL, March 11, 2015 /CNW Telbec/ – Air Canada announced today the pricing of its previously announced private offering of three tranches of enhanced equipment trust certificates (the “Certificates”). The three tranches of certificates have a combined aggregate face amount of U.S.$1,031,390,000 and a weighted average interest rate of 3.810%.

The private offering is comprised of Class A Certificates, Class B Certificates and Class C Certificates. The Class A Certificates will have an interest rate of 3.600% per annum and a final expected distribution date of March 15, 2027. The Class B Certificates will have an interest rate of 3.875% per annum and a final expected distribution date of March 15, 2023. The Class C Certificates will have an interest rate of 5.000% per annum and a final expected distribution date of March 15, 2020.

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 Boeing 787-8 aircraft delivered in January 2015 and eight new Boeing 787-9 aircraft, which are currently scheduled for delivery from July 2015 to March 2016. 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 equipment notes related to the Boeing 787-8 aircraft currently owned by Air Canada for general corporate purposes and to pay fees and expenses related to the offering, and will use the proceeds from the sale of the other equipment notes to finance the acquisition of the eight new Boeing 787-9 aircraft.

The offering is expected to close on March 25, 2015, subject to customary closing conditions.

The Certificates will not be registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), or the securities laws of any other jurisdiction and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and state securities laws. The Certificates will be offered and sold only to persons reasonably believed to be qualified institutional buyers in reliance on Rule 144A under the Securities Act, and to persons other than U.S. persons in transactions outside the United States in reliance on Regulation S under the Securities Act.

The Certificates will not be qualified for sale to the public under applicable Canadian securities laws and, accordingly, any offer and sale of the Certificates in Canada will be made on a basis that is exempt from the prospectus requirement of such securities laws.