Air Canada Announces Prepayment of EDC Financed Loans
Air Canada has announced that it has prepaid loans of approximately $650 million from Export Development Corporation (EDC) used by the company to help fund its acquisition of 19 Airbus A220-300 aircraft. The prepayment, which is also subject to accrued interest, was made on June 21, 2023.
Amos Kazzaz, Executive Vice President and Chief Financial Officer of Air Canada, said: “One of Air Canada’s major financial objectives is to deleverage its balance sheet following the COVID-19 pandemic and prepaying these loans we received for our A220 aircraft is a significant step toward this goal. We appreciate EDC’s assistance in purchasing these Canadian-built aircraft, which not only advanced our fleet modernization program to improve our fuel efficiency and competitiveness, but also helped to ensure that the investments Air Canada is making directly support jobs in Canada’s aerospace industry and contribute to the country’s economy.”
The prepayment of the loans for 19 Airbus A220-300 aircraft financed through EDC was achieved via:
- A full prepayment of Air Canada’s 2021 credit facility with EDC for the acquisition of 15 Airbus A220-300 aircraft
- A partial prepayment of Air Canada’s 2020 credit facility with EDC for the acquisition of 18 Airbus A220-300 aircraft
As a result of the prepayment, these aircraft will be added to Air Canada’s unencumbered asset pool, bringing the total to approximately $5.4 billion, excluding Aeroplan.
The amount of debt prepayments now totals approximately $1.28 billion since and including the repurchase of some of Air Canada’s outstanding 4.000% convertible senior notes due 2025 completed last year, leading to a reduction in interest expense of approximately $115 million (approximately $72 million in cash) on an annualized basis.
