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Air Canada T.AC

Alternate Symbol(s):  ACDVF

Air Canada is an airline company. The Company is a provider of scheduled passenger services in the Canadian market, the Canada-United States (U.S.) transborder market and the international market to and from Canada. It provides scheduled service directly to more than 180 airports in Canada, the United States and internationally on six continents. The Company’s Aeroplan program is Canada's premier travel loyalty program, where members can earn or redeem points on the airline partner network of 45 airlines, plus through a range of merchandise, hotel and car rental rewards. Its freight division, Air Canada Cargo, provides air freight lift and connectivity to hundreds of destinations across six continents using its passenger and freighter aircraft. Its Air Canada Vacations is a tour operator, which is engaged in developing, marketing, and distributing vacation travel packages in the outbound/inbound leisure travel market. Air Canada Rouge is Air Canada's leisure carrier.


TSX:AC - Post by User

Post by logicandinertiaon May 27, 2020 8:08am
274 Views
Post# 31076772

Smart move

Smart move

Sensible to do this now, while the market is open due to central bank liquidity (QE everywhere).  I had stated a while ago if you want to get long, wait for the issue, and here it is.   Retail won't get access to the convert, but call your broker if you are inclined to play long (if they are part of the underwriting syndicate).   It will be at a discount.  And if you as a retail client get calls from your broker about it, then the institutional take up is perhaps not as strong as hoped.  

there will be shorting of the common as part of the convertible arb strategy that some will take on re: the Notes.    

AC has no idea how long it will take for corporate travel to come back nor the impact of a second wave in the fall.   This is prudent decision making to take the cash now.  

This does dilute the common for the first time in about a decade.   And in the context of a $30-50 share price in 2019, this would be deemed expensive equity.  

think about this as you elect to buy or sell.  

 

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