/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.

Copyright 2021 Canada NewsWire

Chorus Aviation (TSX:CHR)
Historical Stock Chart
From Sep 2021 to Oct 2021 Click Here for more Chorus Aviation Charts.
Chorus Aviation (TSX:CHR)
Historical Stock Chart
From Oct 2020 to Oct 2021 Click Here for more Chorus Aviation Charts.