Air Canada Completes Closing of U.S.$2.15 Billion Senior Secured Credit Facilities

• Pays down nearly U.S.$1.1 billion of senior secured indebtedness

• Refinances remaining outstanding amount and strengthens revolving credit facility.

MONTREAL, March 21, 2024 /CNW/ - Air Canada announced today that it has completed the closing of U.S.$2.15 billion senior secured credit facilities, comprised of (i) a U.S.$1.175 billion term loan B maturing in 2031 (the "Term Loan") and (ii) a U.S.$975 million revolving credit facility maturing in 2029 (the "Revolving Facility" and, together with the "Term Loan", the "Senior Credit Facilities"). The aggregate gross proceeds of the Term Loan, together with cash from Air Canada balance sheet of U.S.$1.09 billion, are being applied to refinance all of Air Canada's indebtedness outstanding under its existing U.S.$2.265 billion term loan B maturing in 2028. The Revolving Facility, which is the result of an upsize and extension of Air Canada's existing U.S.$600 million revolving credit facility previously maturing in 2025, is undrawn as of the date hereof, and any future borrowings thereunder would be intended to fund working capital and other general corporate purposes of Air Canada and its subsidiaries. Concurrently with the closing of the Senior Credit Facilities, Air Canada also terminated its undrawn C$200 million revolving credit facility maturing in 2026.

Key highlights of the closing of Senior Credit Facilities include:

• significantly reducing Air Canada's outstanding senior secured indebtedness by U.S.$1.09 billion;
  
  

• reducing Air Canada's interest rate on its term loan B borrowings, to 250 basis points over SOFR (with no SOFR floor, no spread adjustment); and
  
  

• increasing available undrawn amounts under the Revolving Facility by U.S.$375 million.

Air Canada's obligations under the Senior Credit Facilities are senior secured obligations of Air Canada, secured on a first-lien basis, subject to certain permitted liens and exclusions, by certain collateral comprised of substantially all of Air Canada's international routes, airport slots and gate leaseholds.

About Air Canada

Air Canada is Canada's largest airline, the country's flag carrier and a founding member of Star Alliance, the world's most comprehensive air transportation network. Air Canada provides scheduled service directly to more than 180 airports in Canada, the United States and Internationally on six continents. It holds a Four-Star ranking from Skytrax. Air Canada's Aeroplan program is Canada's premier travel loyalty program, where members can earn or redeem points on the world's largest airline partner network of 45 airlines, plus through an extensive range of merchandise, hotel and car rental partners. Through Air Canada Vacations, it offers more travel choices than any other Canadian tour operator to hundreds of destinations worldwide, with a wide selection of hotels, flights, cruises, day tours, and car rentals. Its freight division, Air Canada Cargo, provides air freight lift and connectivity to hundreds of destinations across six continents using Air Canada's passenger and freighter aircraft. Air Canada aims to achieve an ambitious net zero emissions goal from all global operations by 2050. Air Canada shares are publicly traded on the TSX in Canada and the OTCQX in the US.

CAUTION REGARDING FORWARD-LOOKING INFORMATION

This news release includes forward-looking statements within the meaning of applicable securities laws. Forward-looking statements relate to analyses and other information that are based on forecasts of future results and estimates of amounts not yet determinable. These statements may involve, but are not limited to, comments regarding expectations, goals or future actions, including in relation to the Senior Credit Facilities described in this news release.

Forward-looking statements, by their nature, are based on assumptions, including those described herein, are subject to important risks and uncertainties and cannot be relied upon due to, amongst other things, changing external events and general uncertainties of the business. Actual results may differ materially from results indicated in forward-looking statements due to a number of factors, including without limitation, those identified in section 18 "Risk Factors" of Air Canada's MD&A for the year ended December 31, 2023.

The forward-looking statements contained in this news release represent Air Canada's expectations as of the date of this news release (or as of the date they are otherwise stated to be made), and are subject to change after such date. However, Air Canada disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required under applicable securities regulations.