Bombardier offers cash to bondholders to adjust legacy debt
Canadian aerospace manufacturer Bombardier has asked bondholders to adjust its capital structure on legacy debt.
The company announced consent solicitation targeting two specific tranches of legacy debt including the 7.35% Canadian Debentures due 2026 and 7.450% US Notes due 2034.
Bondholders will have access to a one-time consent payment for approving the changes.
The company is adding a lien basket to the tranches allowing it the ability to pledge assets for securing financing up to a limit. Currently, the 2026 and 2034 loans contain restrictive clauses that prevent Bombardier from using certain assets as collateral for new loans.
Challenger and Global aircraft manufacturer has been aggressively deleveraging its balance sheet and pivoted its focus on high-margin business jet market. The move will allow Bombardier to access future refinancing opportunities or strategic credit facilities.
Global Bondholder Services will act as the US Information and Tabulation Agent for the solicitation on the US Notes while Kingsdale Advisors will act as the agent for the solicitation for the Canadian Notes.
The US notes will require a simple majority of above 50% to accept the changes while Canadian notes have a more stringent requirement of 66.67%.
The deadline for the US Notes is tomorrow, March 20, while holders of the Canadian Notes have until March 27.
RBC Capital Markets along with TD Securities will act as the agents for the consent solicitations.
Earlier in the second week of March, the company completed redemption of all remaining outstanding 6% senior notes due 2028. It said that it has redeemed all remaining outstanding $250m aggregate principal amount of its 6% senior notes due 2028.
This debt redemption was funded using cash from Bombardier’s balance sheet.
The company’s liquidity at the end of 2025 stood at $2.5bn,
During 2025, the company repaid senior notes to the tune of $1,149m retiring $800m of its 2027 senior notes and $349 from its 2026 and 2027 notes.
