Not exactly the bonanza some are waiting forFirst, the debt amount: The 1,4B$ loan at 1,2 % for the customer's credit is the only additional net debt. This credit reimburse customers deposits (at 0%, it was free money). The 1,2 % rate is almost non material.
The 2 other debt don't change the net debt given that they add cash to the balance sheet. The monthly cash burn will add to the net debt. But the AC cash position will be huge and they will have all the cash they need for the next two years at least.
The conditions are more favorable to AC than the actual market conditions for a B rated company but it's far from what some are waiting for ( 1% interest rate loans). The first slice is secured by Aeroplan and the some unsecured parts are at 6,5%, 7,5% and 8,5%.
The 20M new Shares and the warrants are dissappointing for shareholders.
AC will have access to all the cash they need at reasonnable conditions, but they had to accept the resumption of aerial service to small collectivities and the shareholders will have to accept another dilution.
Mickael Sabia did a good job for the tax payers. That's a balanced proposition for them and my though is that the taxpayer is the winner of this deal. Canada will keep is National carrier, the small cities will be served, a minimum employment level is mandatory the loans conditions (except the 1,4M$ at 1,2%) are only at slitly under market conditions and the shares could give a boost to the return..
As a debholder, the additional equity and the avalanche of cash is reassuring.
I don't own share actually but it's not so positive for them. I expect volatility and a closing slightly lower tomorrow.