Air Canada reduces term loan B to $300 million as bonds upsized

By Sara Rosenberg

New York, Sept. 18 - Air Canada downsized its six-year term loan B to $300 million from $700 million and added a new $400 million senior first-lien bond tranche to its notes offering, according to sources.

Also, the soft call protection on the term loan B was revised to 102 in year one and 101 in year two from just 101 for six months, sources said.

Pricing on the B loan is still Libor plus 450 basis points with a 1% Libor floor and an original issue discount of 99.

The company's now $400 million senior secured credit facility, down from $800 million, also includes a $100 million four-year revolver.

Recommitments were due at the end of the day on Wednesday, sources added.

Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, J.P. Morgan Securities LLC, Morgan Stanley Senior Funding Inc. and TD Securities (USA) LLC are the bookrunners on the deal.

Proceeds will be used to refinance existing debt, including 9¼% senior secured notes due 2015, 10 1/8% senior secured notes due 2015 and 12% senior second-lien notes due 2016.

Other funds for the transaction will come from $300 million of senior second-lien notes.

The tender offers expire on Sept. 18.

Air Canada is a Montreal-based airline company.

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