Milbank, Tweed, Hadley & McCloy LLP advised a group of leading financial institutions in structuring and executing an approximately $1.4 billion refinancing for Air Canada through a complex transaction that included three new tranches of secured notes totaling over $1 billion, denominated in U.S. dollars and Canadian dollars, a new $400 million credit facility and concurrent tender offers and consent solicitations for all of Air Canada’s previously outstanding secured notes.
Milbank represented J.P. Morgan as representative of the initial purchasers of Air Canada’s $400 million 6.750% senior secured notes due 2019 and Air Canada’s $300 million 8.750% senior second lien notes due 2020, and represented TD Securities as representative of the initial purchasers of Air Canada’s C$300 million 7.625% senior secured notes due 2019.
Milbank also represented Citibank as administrative agent and lender under a new $300 million term loan maturing in 2019 and a $100 million revolving credit facility and Citigroup as dealer-manager and solicitation agent in connection with Air Canada’s tender offers for its outstanding $600 million 9.250% senior secured notes due 2015, C$300 million 10.125% senior secured notes due 2015 and $200 million 12.000% senior second lien notes due 2016.
Air Canada will use the net proceeds from the bond offerings and borrowings under the term loan to repurchase its outstanding secured notes pursuant to the tender offers and redeem any notes not tendered pursuant thereto, and will use any remaining proceeds for working capital and general corporate purposes.
Milbank’s deal team was led on the bond side by Arnold Peinado, partner in the Global Securities group. Hugh Robertson, partner in the firm’s Transportation Finance group, led the Milbank team representing the lenders under the credit facility. Stuart Morrissy, partner in the Global Securities group, led the Milbank team on the tender offer work.
Mr. Peinado said, “We are very pleased to have assisted the banks on this important and multifaceted transaction on behalf of Canada’s largest airline, which allowed Air Canada to refinance its long-term debt in a favorable credit market.”
In addition to Messrs. Peinado, Robertson, and Morrissy, Milbank attorneys on the refinancing transaction included associates Kevin MacLeod, Mindy Allen, Meredith Hines and Kaveh Namazie of the Global Securities group and Special Counsel James Pascale and associates Andrew Park and William Corso of the Transportation Finance group.
