Air Canada Successfully Completes US$400 Million Unsecured Financing

MONTREAL, April 15, 2014 /CNW Telbec/ – Air Canada announced today that it has completed its previously announced private offering of US$400 million of 7.75% senior unsecured notes due 2021 (the “Notes”). Air Canada received net proceeds of approximately C$432 million from the sale of the Notes and will use these proceeds for general corporate purposes.

“The successful completion of our unsecured note offering is another significant transformational event for Air Canada as we enter a new phase of capital investment in our fleet and product,” said Calin Rovinescu, President and Chief Executive Officer. “I was especially pleased with the offering’s reception. The capital markets have demonstrated their confidence in Air Canada by extending us credit on an unsecured basis on competitive terms, recognizing, among other things, Air Canada’s improved leverage ratios, credit ratings and profitability, as well as the elimination of the pension deficit overhang. I would also like to recognize the work of our legal and finance teams in concluding this offering in a timely manner and on favourable terms.”

The Notes were sold at par and provide for interest payable semi-annually. The Notes are senior unsecured obligations of Air Canada, and are guaranteed on a senior unsecured basis by one of Air Canada’s subsidiaries.

The Notes were offered and sold in the United States only to qualified institutional buyers in reliance on Rule 144A under the U.S. Securities Act of 1933, as amended (the “Securities Act”), and to certain non-U.S. persons in transactions outside the United States in reliance on Regulation S under the Securities Act. The Notes have not been and will not be qualified for sale to the public under applicable Canadian securities laws and, accordingly, any offer and sale of the Notes in Canada will be made on a basis that is exempt from the prospectus requirement of such securities laws. The Notes have not been and will not be registered under 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.