Chorus Aviation 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 at a price of $1,000 per Debenture.

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 and in certain circumstances the $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 dated December 6, 2019, as supplemented by a first supplemental indenture to be entered into between Chorus and the Trustee on the closing date of the offering.

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.

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.