CAE to issue US$550 million of senior unsecured notes in private placement and concludes monetization of future royalty oblig...
21 December 2018 - 10:00PM
(NYSE: CAE; TSX: CAE) – CAE today announced that
it has entered into an agreement to issue a series of unsecured
senior notes through a private placement. The company also
announced the conclusion of its previously disclosed transaction to
monetize its existing future royalty obligations to Bombardier.
Issuance of US$550 million senior unsecured
notesThe notes issuance is subject to customary closing
conditions and proceeds will be used to fund CAE’s acquisition of
Bombardier’s Business Aircraft Training Business and to refinance
some of CAE’s existing debt and recent term loans announced on
November 8, 2018. The notes will be issued in several US dollar
denominated tranches with fixed interest rates ranging from
4.45 to 4.90 percent annually and maturities ranging from 10 to 15
years. Note holders include 19 large institutional investors in the
United States and Canada.
“We are pleased with the market’s response to our notes offering
and to have secured CAE’s borrowing costs at attractive interest
rates for up to fifteen years,” said Sonya Branco, CAE’s Vice
President, Finance and Chief Financial Officer. “The private
placement includes several new institutional investors in addition
to long-time note holders, reflecting the high degree of confidence
in CAE. The financing aligns well with CAE’s capital
allocation strategy, which balances growth investments, current
shareholder returns, and the maintenance of a solid financial
position. CAE’s debt structure and strong free cash flow profile
provide good flexibility to continue funding profitable growth
while further strengthening our balance sheet. "
TD Securities is acting as agent on this transaction.
Conclusion of monetization transactionCAE also
announced that it has concluded its previously disclosed
monetization of existing future royalty obligations to Bombardier
for US$155 million, which was financed separately using a
combination of cash and its existing credit facility. CAE’s
acquisition of Bombardier’s Business Aircraft Training (BAT) for an
enterprise value of US$645 million is subject to regulatory
approvals and is expected to close by the second half of calendar
year 2019 (please refer to our cautionary note regarding
forward-looking statements included in the November 8, 2018 press
release announcing the transaction).
About CAE CAE is a global leader in
training for the civil aviation, defence and security, and
healthcare markets. Backed by a record of more than 70 years of
industry firsts, we continue to help define global training
standards with our innovative virtual-to-live training solutions to
make flying safer, maintain defence force readiness and enhance
patient safety. We have the broadest global presence in the
industry, with over 9,000 employees, 160 sites and training
locations in over 35 countries. Each year, we train more than
220,000 civil and defence crewmembers, including more than 135,000
pilots, and thousands of healthcare professionals worldwide.
www.cae.com
Follow us on Twitter: CAE_Inc
CAE contacts:
Hélène V. Gagnon, Vice President, Public Affairs and Global
Communications,+1-514-340-5536, helene.v.gagnon@cae.com
Investor relations: Andrew Arnovitz, Vice
President, Strategy and Investor Relations,+1-514-734-5760,
andrew.arnovitz@cae.com
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