Bombardier Inc. today announced that it has successfully priced its offering of US$2.25 billion aggregate principal amount of new Senior Notes. The issuance is comprised of US$750 million aggregate principal amount of Bombardier’s Senior Notes due September 15, 2018 which carry a coupon of 5.500% per annum and will be sold at par (the “2018 Notes”), and US$1.5 billion aggregate principal amount of Bombardier’s Senior Notes due March 15, 2025 which carry a coupon of 7.500% per annum and will be sold at par (the “2025 Notes,” and together with the 2018 Notes, the “Notes”). The issuance is expected to close on or about March 13, 2015, subject to customary closing conditions.
Bombardier will deposit, or direct the deposit of, cash in an amount equal to the aggregate principal amount of Notes, plus interest that is expected to accrue on the aggregate principal amount of the Notes as calculated in accordance with the terms of the indentures governing the Notes from the closing date of the issuance to, but not including, the third business day following April 30, 2015 (the “Escrowed Funds”), into escrow. Subject to the release to Bombardier of the net proceeds from the previously announced issuance and sale of subscription receipts of Bombardier pursuant to a prospectus supplement dated February 20, 2015 to Bombardier’s short form base shelf prospectus dated February 18, 2015 (the “Escrow Release Condition”), the Escrowed Funds will be released to Bombardier. In the event that the Escrow Release Condition is not satisfied by 5:00pm (Montreal time) on April 30, 2015, the Notes will be subject to a special mandatory redemption.
Bombardier intends to use the proceeds of this offering to finance the redemption of all of Bombardier’s outstanding 4.25% Senior Notes due January 2016 (the “2016 Notes”) pursuant to an optional redemption promptly after the Escrowed Funds are released to Bombardier, to pay fees and expenses related to this offering and related transactions, and, as to the remainder, for general corporate purposes.
This press release does not constitute an offer to sell or the solicitation of an offer to buy any security and shall not constitute an offer, solicitation or sale of any securities in any jurisdiction in which such offering, solicitation or sale would be unlawful. The securities mentioned herein may be offered and sold in the United States only to qualified institutional buyers in accordance with Rule 144A under the U.S. Securities Act and outside the United States in reliance on Regulation S under the U.S. Securities Act. The securities mentioned herein have not been and will not be registered under the United States Securities Act of 1933, as amended, any state securities laws or the laws of any other jurisdiction, and may not be offered or sold in the United States absent registration or an applicable exemption from such registration requirements. The securities mentioned herein have not been and will not be qualified for distribution to the public under applicable Canadian securities laws and, accordingly, any offer and sale of the securities in Canada will be made on a basis which is exempt from the prospectus and dealer registration requirements of such securities laws. The securities will be offered and sold in Canada on a private placement basis only to “accredited investors” pursuant to certain prospectus exemptions.
Any redemption of the 2016 Notes will be made pursuant to a notice of redemption under the indenture governing the 2016 Notes.
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This press release includes forward-looking statements, which may involve, but are not limited to: statements with respect to the Corporation’s objectives, guidance, targets, goals, priorities, market and strategies, financial position, beliefs, prospects, plans, expectations, anticipations, estimates and intentions; general economic and business outlook, prospects and trends of an industry; expected growth in demand for products and services; product development, including projected design, characteristics, capacity or performance; expected or scheduled entry-into-service of products and services, orders, deliveries, testing, lead times, certifications and project execution in general; competitive position; and the expected impact of the legislative and regulatory environment and legal proceedings on the Corporation’s business and operations; the Corporation’s available liquidities and the Corporation’s capital raising plan, the completion and release of the proceeds of the offering and the use of proceeds therefrom; the impact of the offering on the Corporation’s operations, infrastructure, opportunities, financial condition, access to capital and overall strategy; the receipt of required regulatory and other approvals, including shareholder approval; and the anticipated timing of the shareholders’ meeting. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “may”, “will”, “expect”, “intend”, “anticipate”, “plan”, “foresee”, “believe”, “continue”, “maintain” or “align”, the negative of these terms, variations of them or similar terminology. By their nature, forward-looking statements require management to make assumptions and are subject to important known and unknown risks and uncertainties, which may cause actual results in future periods to differ materially from those forecasted. While management considers these assumptions to be reasonable and appropriate based on information currently available, there is risk that they may not be accurate. Certain important assumptions by the Corporation or its consultants in making forward-looking statements include, but are not limited to: the satisfaction of the Escrow Release Condition; the satisfaction of all conditions to the completion, effectiveness or availability, as the case may require, of the offering; the successful completion of the offering; and the Corporation’s ability to consummate the offering. For additional information with respect to the assumptions underlying the forward-looking statements made in this press release, refer to the respective Guidance and forward-looking statements sections in Aerospace and in Transportation in the Management’s Discussion and Analysis (MD&A) of the Corporation’s financial report for the fiscal year ended December 31, 2014.
Certain factors that could cause actual results to differ materially from those anticipated in the forward-looking statements include, but are not limited to, risks associated with general economic conditions, risks associated with the Corporation’s business environment (such as risks associated with the financial condition of the airline industry and major rail operators), operational risks (such as risks related to developing new products and services; doing business with partners; product performance warranty and casualty claim losses; regulatory and legal proceedings; the environment; dependence on certain customers and suppliers; human resources; fixed-price commitments and production and project execution), risks relating to the Corporation’s ability to implement its capital raising plan and mitigate potential liquidity underperformance; financing risks (such as risks related to liquidity and access to capital markets, exposure to credit risk, certain restrictive debt covenants, financing support provided for the benefit of certain customers and reliance on government support); the Escrow Release Condition not being satisfied; and market risks (such as risks related to foreign currency fluctuations, changing interest rates, decreases in residual values and increases in commodity prices). For more details, see the Risks and uncertainties section in Other in the MD&A of the Corporation’s financial report for the fiscal year ended December 31, 2014. Readers are cautioned that the foregoing list of factors that may affect future growth, results and performance is not exhaustive and undue reliance should not be placed on forward-looking statements. The forward-looking statements set forth herein reflect management’s expectations as at the date of this press release and are subject to change after such date. Unless otherwise required by applicable securities laws, the Corporation expressly disclaims any intention, and assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this press release are expressly qualified by this cautionary statement.