Air Canada 2014 Annual Report Download - page 105

105
2014 Consolidated Financial Statements and Notes
FINAL
MATURITY
WEIGHTED
AVERAGE
INTEREST RATE
(%) 2014 2013
AIRCRAFT FINANCING (A)
Fixed rate U.S. dollar financing 2015 - 2026 $ 5.92 $ 2,029 $ 1,706
Floating rate U.S. dollar financing 2015 - 2026 1.79 582 609
Floating rate CDN dollar financing 2026 1.93 310 -
Floating rate Japanese yen financing 2020 0.24 94 116
Senior secured notes – U.S. dollar (b) 2019 - 2020 7.61 812 745
Senior secured notes – CDN dollar (b) 2019 7.63 300 300
Senior unsecured notes – U.S. dollar (c) 2021 7.75 464 -
Other secured financing – U.S. dollar (b) and (d) 2016 - 2019 5.63 433 467
Other secured financing – CDN dollar (e) 2016 - - 126
LONG-TERM DEBT 5.61 5,024 4,069
Finance lease obligations (f) 2015 - 2033 10.08 283 328
TOTAL DEBT AND FINANCE LEASES 5.85 5,307 4,397
Unamortized debt issuance costs (91) (64)
Current portion (484) (374)
LONG-TERM DEBT AND FINANCE LEASES 4,732 3,959
The total weighted average interest rate presented
above excludes the impact of interest rate swaps
applicable to certain aircraft financing arrangements.
(a) Aircraft financing (US$2,250, CDN $310 and
JPY9,677) is secured primarily by specific aircraft with
a carrying value of $3,835 (2013 – $3,222). For the
majority of the financing, principal and interest is
repayable quarterly until maturity and can be repaid
at any time with the payment of applicable fees.
US$490, CDN $310 and JPY9,677 of the financing is
supported by a loan guarantee by the Export-Import
Bank of the United States (“EXIM”).
In 2013, in connection with the financing of five
new Boeing 777-300ER aircraft, four of which
were delivered in 2013, with the remaining aircraft
delivered in 2014, the Corporation completed a
private offering of three tranches of enhanced
equipment trust certificates (“EETC”) with a combined
aggregate face amount of US$715.
The private offering is comprised of Class A, Class B
and Class C certificates.
• The Class A certificates, with a US$425 face
amount, have an interest rate of 4.125% per
annum, with interest paid semi-annually, and a
final expected distribution date of May 15, 2025.
• The Class B certificates, with a US$182 face
amount, have an interest rate of 5.375% per
annum, with interest paid semi-annually, and a
final expected distribution date of May 15, 2021.
• The Class C certificates, with US$108 face amount,
will have an interest rate of 6.625% per annum,
with interest paid semi-annually and a final
expected distribution date of May 15, 2018.
The trust certificates have a weighted average interest
rate of approximately 4.7% per annum.
The trust certificates represent an interest in three
separate pass through trusts. The trusts consist of
a separate trust for each of the Class A, B and C
certificates. The trusts use the proceeds from the
offering to acquire equipment notes that are issued
to finance the acquisition of each of the five new
Boeing 777-300ER aircraft.
The equipment notes issued are secured by each of
the five Boeing 777-300ER aircraft acquired, and
the security interest in each of the aircraft benefits
from the protections of the Cape Town Convention
on International Interests in Mobile Equipment and
the Protocol thereto on Matters Specific to Aircraft
Equipment, as enacted in Canada.
(b) In September 2013, the Corporation completed
private offerings of senior secured notes, consisting of
(i) US$400 principal amount of 6.750% senior secured
first lien notes due 2019 and $300 principal amount
of 7.625% senior secured first lien notes due 2019
(the “New Senior First Lien Notes”) and (ii) US$300
principal amount of 8.750% senior secured second
8. LONG-TERM DEBT AND FINANCE LEASES