Air Canada Raises $1.02B

On July 30, 2009, Air Canada entered into arrangements to raise a total of $1.02 billion in additional liquidity through a series of financings and other transactions with certain lenders and key stakeholders, including a financing agreement with GE Canada Finance Holding Company (GE Capital), Export Development Canada, Aeroplan Canada Inc. and ACE Aviation Holdings Inc., as lenders. GE Capital acted as administrative agent and GE Capital Markets Inc., together with GE Capital Markets (Canada) Ltd., acted as arrangers. The secured financing extends a term credit facility of up to $700 million (the credit agreement) for the purpose of refinancing certain debt, to provide funding for working capital and other general corporate purposes. As part of the transactions under the credit agreement, Air Canada issued to the lenders, concurrently with the first drawdown, warrants for the purchase of Air Canada's Class A variable voting shares or Class B voting shares representing an aggregate of five per cent of the total issued and outstanding shares, to be allocated among the lenders based on their pro rata lending commitments under the credit agreement.

Immediately prior to drawdown under the credit agreement, Canadian Imperial Bank of Commerce assigned all of its right, title and interest in its secured credit facility with Air Canada to the new lenders. Air Canada also terminated its revolving loan agreement with Aeroplan Canada Inc. and its secured engine facility for 22 engines.

Air Canada was represented by its in-house team, including David Shapiro, Arielle Meloul-Wechsler, Anna-Maria Masciotra, Jeffrey Wood, David Perez, Valerie Durand and Andrea Sepinwall and assisted by Stikeman Elliott LLP with a team that included Sterling H. Dietze, Howard J. Rosenoff, Kenton Rein, Michael Dyck, Scott Perrin, Jill Lankin, Gabrielle Bélanger and Marie-Aude Gagnon Rousseau (banking); Brenda Hebert, Douglas Klaassen, Valérie Mac-Seing and Andy Gibbons (real estate) and Robert Carelli and Lydia Pham (securities); by Giles Brand of Norton Rose LLP (UK counsel) and by Duncan Klinedinst and Elizabeth Book of Hogan & Hartson LLP (US counsel).

GE Capital, in its capacity as agent and a lender, was represented in-house by Jennifer Guerard (GE Canada Finance Holding Company) and John Ludden (GE Capital Aviation Services) and by McMillan LLP with a team that included Jeffrey Rogers, Andrew Kent, Stephanie Robinson, Andrew McFarlane, Kathy Martin, Cheryl Stacey, Puja Varma, David Hudson (finance); David Slan, Robert Antenore, Maria Holder and Kathryn Borgatti (real estate); Les Chaiet (corporate); Stewart Ash and Jason Chertin (public markets); Kim Ozubko (pensions); Patrice Beaudin (in Québec) and Matthew Potts (in Alberta).

Robert Thornton and Sara-Ann Wilson of ThorntonGroutFinnigan LLP acted as special restructuring counsel to GE Canada Finance Holding Company and GE Capital Aviation Services.

Donald Gray of Cassels Brock & Blackwell LLP acted as special aviation counsel in Canada to GE Canada Finance Holding Company and GE Capital Aviation Services.

Clifford Chance LLP acted as US counsel, UK counsel and as special aviation counsel to GE Canada Finance Holding Company and GE Capital Aviation Services with a team that included John Howitt, Rebecca Watson and Kelly Murphy (in the US) and William Glaister and Patrick O'Reilly (in the UK).

Export Development Canada, a lender in the syndicate, was represented by its in-house legal team including Norman Bayne and Caroline P. Melia and assisted by Fasken Martineau DuMoulin LLP with a team that included David Lemieux, Jon Holmstrom and Félix Gutierrez.

Industry Canada and Transport Canada were led by the team of Pierre Legault (Justice Canada) and Henry Schultz and Alain Langlois (Transport Canada) and assisted by Laura Safran, Scott Sangster and Stephanie Campbell of Fraser Milner Casgrain LLP.

ACE Aviation Holdings Inc., a lender in the syndicate, was represented by Robert Metcalfe, Garth Girvan and Mary Jeanne Phelan of McCarthy Tétrault LLP.

Aeroplan Canada Inc., a lender in the syndicate, was represented in-house by Mark Hounsell, senior vice president, general counsel and corporate secretary, and by Ogilvy Renault LLP with a team consisting of Patrick M. Shea, Nicole C. Sigouin, Ruth I. Wahl, Nicola Ezra and Mark Bailey (banking); Norman M. Steinberg and Stephen J. Kelly (securities); Derrick C. Tay and Mario J. Forte (insolvency and restructuring) and Adrienne F. Oliver (tax).