/NOT FOR DISTRIBUTION IN THE UNITED
STATES OR OVER UNITED
STATES WIRE SERVICES./
HALIFAX, NS, Sept. 16, 2021 /CNW/ - Chorus Aviation Inc.
("Chorus" or the "Company") (TSX: CHR) announced today that it has
entered into an agreement with a syndicate of underwriters led by
RBC Capital Markets, CIBC Capital Markets, Scotiabank and BMO
Capital Markets, as bookrunners, under which they have agreed to
purchase from Chorus and sell to the public $85 million aggregate principal amount of senior
unsecured debentures due June 30,
2027 (the "Debentures") at a price of $1,000 per Debenture (the "Offering"). Chorus has
also granted the underwriters the option to purchase up to an
additional $12.75 million aggregate
principal amount of Debentures, on the same terms and conditions,
exercisable in whole or in part, for a period of 30 days following
the closing of the Offering.
The Debentures will bear interest from the date of issue at
5.75% per annum, payable semi-annually in arrears on June 30 and December
31 of each year commencing June 30,
2022, and will mature on June
30, 2027.
The net proceeds of this offering will be used primarily to
partially redeem existing indebtedness, including the Company's
6.00% senior debentures due December 31,
2024 (the "6.00% Debentures") and in certain circumstances
the US$100 million revolving
facility, as well as for working capital and general corporate
purposes. The 6.00% Debentures are currently secured by certain
Dash 8-100 and Dash 8-300 aircraft, as well as certain real estate
owned by the Company's subsidiaries. The security will be released
once all of the 6.00% Debentures have been redeemed.
The Debentures will be governed by the indenture between Chorus
and the trustee appointed thereunder (the "Trustee") dated
December 6, 2019 (the "Base
Indenture"), as supplemented by a first supplemental indenture to
be entered into between Chorus and the Trustee on the closing date
of the Offering (the "Supplemental Indenture", and together with
the Base Indenture, the "Indenture").
The Debentures will not be redeemable by the Company before
March 31, 2024, except upon the
occurrence of a change of control of the Company in accordance with
the terms of the Indenture. On or after March 31, 2024 and prior to March 31, 2025, the Debentures will be
redeemable, in whole or in part, at the option of the Company at a
price equal to 104.3125% of the principal amount of the
Debentures redeemed plus accrued and unpaid interest. On or after
March 31, 2025 and prior to
March 31, 2026, the Debentures will
be redeemable, in whole or in part, at the option of the Company at
a price equal to 102.875% of the principal amount of the Debentures
redeemed plus accrued and unpaid interest. On or after March 31, 2026, the Debentures will be redeemable
at the option of the Company at a price equal to the principal
amount of the Debentures redeemed plus accrued and unpaid
interest.
Subject to compliance with all applicable securities laws and
subject to any regulatory approval and provided no event of default
has occurred and is continuing under the Indenture, the Company
will have the option to satisfy its obligation to pay the principal
amount of the Debentures due at redemption or maturity (together
with any applicable premium) by delivering freely tradeable Class B
Voting Shares ("Class B Shares") to holders of Debentures who are
Canadians (as defined in the Canada Transportation Act)
("Qualified Canadians") or Class A Variable Voting Shares ("Class A
Shares" and together with the Class B Shares, the "Voting Shares")
to holders of Debentures who are not Qualified Canadians. Any
accrued and unpaid interest will be paid in cash. In such event,
payment will be satisfied by delivering for each $1,000 due, that number of freely tradeable
Voting Shares obtained by dividing $1,000 by 95% of the current market price
(determined in accordance with the Indenture) on the date fixed for
redemption or maturity. The Debentures will not be convertible into
Voting Shares at the option of the holders of Debentures at any
time.
The Debentures will be direct, senior unsecured obligations of
the Company and will rank: (i) subordinate to all existing and
future senior secured and other secured indebtedness of the
Company, but only to the extent of the value of the assets securing
such secured indebtedness; (ii) pari passu with one another
and equally in right of payment from the Company with all other
unsubordinated unsecured indebtedness of the Company except as
prescribed by law; and (iii) senior to any other existing and
future subordinated unsecured indebtedness of the Company. The
Debentures will rank pari passu with the Company's 5.75%
senior unsecured debentures due December 31,
2024.
The Debentures will be subject to an agreement (the
"lntercreditor Agreement") dated December 6,
2019 between the Trustee, on behalf of the holders of
debentures issued under the Base Indenture, and Chorus' lender(s)
(the "Senior Creditors") under certain credit facilities made
available pursuant to a second amended and restated credit
agreement dated June 28, 2019 (as
further amended, the "Credit Facilities"). The Intercreditor
Agreement, among other things, provides that to the extent any
amounts remain outstanding under the Credit Facilities after the
Senior Creditors have realized on their security in the context of
an insolvency event involving Chorus, any proceeds received by the
Trustee on behalf of the holders of debentures in connection with
such event will be directly remitted to the applicable Senior
Creditors until the applicable Credit Facilities are paid in
full.
The Debentures will be offered by way of a prospectus supplement
to the Company's short form base shelf prospectus dated
September 2, 2021 in all of the
provinces and territories of Canada and may also be offered by way of
private placement in the United
States to Qualified Institutional Buyers pursuant to Rule
144A of the U.S. Securities Act of 1933, as amended (the "U.S.
Securities Act"). This news release shall not constitute an offer
to sell or the solicitation of an offer to buy, nor shall there be
any offer, solicitation or sale of the securities in any province,
state or jurisdiction in which such offer, solicitation or sale
would be unlawful. The Debentures have not been and will not be
registered under the U.S. Securities Act, and may not be offered or
sold in the United States absent
registration or an applicable exemption from the registration
requirements of the U.S. Securities Act and other applicable
securities laws.
The Offering is subject to customary regulatory approvals,
including approval of the TSX. The Offering is expected to close on
or about September 27,
2021.
About Chorus
Chorus is a global provider of integrated regional aviation
solutions. Chorus' vision is to deliver regional aviation to the
world. Headquartered in Halifax, Nova
Scotia, Chorus is comprised of Chorus Aviation Capital – a
leading, global lessor of regional aircraft, and Jazz Aviation and
Voyageur Aviation – companies that have long histories of safe
operations with excellent customer service. Chorus provides a full
suite of regional aviation support services that encompasses every
stage of an aircraft's lifecycle, including aircraft acquisitions
and leasing; aircraft refurbishment, engineering, modification,
repurposing, and preparation; contract flying; and aircraft and
component maintenance, disassembly, and parts provisioning.
Chorus' Voting Shares trade on the Toronto Stock Exchange under
the trading symbol 'CHR'. Chorus' 6.00% Debentures, 5.75% Senior
Unsecured Debentures, and 6.00% Convertible Senior Unsecured
Debentures trade on the Toronto Stock Exchange under the trading
symbols 'CHR.DB', 'CHR.DB.A', and 'CHR.DB.B', respectively.
www.chorusaviation.com
Forward-Looking Information
This news release contains 'forward-looking information' as
defined under applicable Canadian securities legislation.
Forward-looking information is identified by the use of terms and
phrases such as "anticipate", "believe", "could", "estimate",
"expect", "intend", "may", "plan", "predict", "potential",
"project", "will", "would", and similar terms and phrases,
including references to assumptions. Forward-looking
information involves known and unknown risks, uncertainties and
other factors that may cause actual results, performance or
achievements to differ materially from those expressed in the
forward-looking information. Examples of statements containing
forward-looking information in this news release include the
anticipated closing and closing date of the Offering and the
anticipated use of proceeds. Results indicated in forward-looking
information may differ materially from actual results for a number
of reasons, including the failure to close the transactions
referenced in this news release on the terms and conditions
currently contemplated by Chorus, or at all, a prolonged duration
of the COVID-19 pandemic and/or further restrictive measures to
contain its spread, the evolving impact of the COVID-19 pandemic on
Chorus' contractual counterparties, as well as those described in
Chorus' most recent Annual Information Form and Management's
Discussion and Analysis of Results of Operations and Financial
Condition. Statements containing forward-looking information in
this news release are made as of the date of this news release and
Chorus does not undertake any obligation to publicly update such
statements to reflect new information, subsequent events or
otherwise unless required by applicable securities laws.
SOURCE Chorus Aviation Inc.