Chorus Aviation Inc. has announced the pricing of a senior unsecured note offering bearing interest at 7.00 % and maturing in 2031, for an aggregate principal amount of 250 million Canadian dollars. Carried out through a private placement, the transaction marks an important step in the refinancing strategy of the Halifax based aviation group. At the same time, the company disclosed its intention to redeem all of its outstanding senior unsecured convertible debentures Series C, confirming management's commitment to optimizing the company's capital structure and reducing its overall cost of financing.
Details of the bond placement
The new notes will bear interest at an annual rate of 7.00 %, payable semi annually in arrears. They will mature in 2031, offering subscribers a multi year investment horizon at an attractive yield given current capital market conditions. The full principal of 250 million Canadian dollars will be paid in cash at closing, subject to customary private placement conditions. The securities are intended for qualified investors and are not being offered to the public in Canada or in the United States.
Intended use of net proceeds
Chorus Aviation plans to use the net proceeds from the offering, together with existing liquidity, to fully redeem its outstanding Series C convertible unsecured debentures, to repay a portion of other debt instruments, and for general corporate purposes. This reallocation will enable the company to simplify its capital structure, extend the maturity profile of its debt, and reduce its exposure to certain facilities maturing in the shorter term. Management sees the move as consistent with the strategic evolution of the group, now focused on its global regional aircraft leasing and asset management activities.
Redemption of the Series C debentures
Pursuant to the notice sent to holders, Chorus intends to redeem all of its outstanding senior unsecured convertible debentures Series C in accordance with the terms and conditions set out in the trust indenture governing those securities. Before the redemption date, holders may exercise their conversion right in accordance with the applicable provisions, or receive the redemption price in cash, plus accrued and unpaid interest. The operation will bring this tranche of convertible debt to a close and remove from the balance sheet an instrument that could, over time, lead to additional dilution for shareholders.
“This refinancing strengthens our balance sheet, extends our maturities and gives us the flexibility required to pursue our growth as a global leader in regional aircraft leasing,” said the financial leadership of Chorus Aviation Inc.
Chorus Aviation's positioning
Chorus Aviation is a Canadian player with international reach in the regional aviation sector. Its activities include regional aircraft leasing to carriers around the world through Falko Regional Aircraft, as well as contract flying services provided by Jazz Aviation and Voyageur Aviation. The group employs highly qualified personnel across multiple disciplines (flight operations, maintenance, engineering, logistics, finance and administration). In Quebec, its technical services and support activities contribute to the vitality of a world renowned aerospace ecosystem.
A positive signal for the industry and employment
Beyond the strictly financial aspects, this transaction reflects renewed market confidence in regional transport and aircraft leasing players. For the Quebec industry, which includes many suppliers, maintenance centres and engineering firms active in the regional aviation value chain, solid financing of major operators and lessors often translates into sustained mandates and increased demand for skilled labour. Aircraft maintenance technicians, avionics specialists, engineers, maintenance planners and program managers are among the most sought after profiles in this favourable context.
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