Halifax International Airport Authority (“HIAA”) announced today that it has commenced the solicitation of written consent (the “Consent Solicitation”) from the holders of all outstanding series of obligation bonds and pledged bonds (collectively, the “Bonds”) to obtain approval of certain amendments (the “Proposed Amendments”) to the trust indenture governing the Bonds (the “Indenture”).
The Proposed Amendments, which are described in a consent solicitation statement (the “Solicitation Statement”) distributed to the holders of all Bonds, would temporarily relieve HIAA from its obligations to meet certain debt service coverage ratios and to satisfy such ratios in incurring additional indebtedness or in proceeding to sell, lease or dispose of any material portion of its property and assets.
Consistent with the experience of all participants in the global aviation industry, there has been a significant decline in passenger and flight activity at Halifax Stanfield International Airport in 2020 as a result of travel restrictions, border closures and other public health measures and restrictions imposed by governments in response to the COVID-19 pandemic. HIAA has taken steps and implemented a number of measures to address the financial and operational impacts of the COVID-19 pandemic and expects to meet its payment obligations on the Bonds as they come due. Despite these measures, if passenger volumes and associated revenues and airport improvement fees are lower than anticipated in 2021 and 2022, HIAA’s ability to comply with certain covenants under the Indenture may be adversely affected. Accordingly, HIAA is proactively seeking the Proposed Amendments out of an abundance of caution for its 2020, 2021 and 2022 fiscal years. The Proposed Amendments will reduce the possibility of triggering an event of default under the Indenture, enable HIAA to obtain additional financing and provide HIAA with flexibility to operate its business and navigate through the challenges created by the COVID-19 pandemic.
If holders of Bonds representing not less than 66⅔% of the principal amount of all outstanding Bonds as of December 10, 2020 (the “Record Date”), and the sole holder of the pledged bonds, deliver consent forms confirming their consent to the Proposed Amendments by 5:00 p.m. (Toronto time) on December 29, 2020 (the “Expiration Time”), an extraordinary resolution approving the Proposed Amendments will be approved.
HIAA will pay a consent fee (“Consent Fee”) equal to $1.00 for each $1,000 outstanding principal amount of the obligation bonds and the outstanding obligations under the pledged bonds as of the Record Date in respect of which a valid Consent Form is received prior to the Expiration Time, regardless of whether the holder elected to consent in favour or not. HIAA’s obligation to pay the Consent Fee is conditional upon, among other things, the satisfaction or waiver of certain conditions described in the Solicitation Statement.
HIAA has retained RBC Dominion Securities Inc., as solicitation agent, and Computershare Trust Company of Canada, as tabulation agent, in connection with the Consent Solicitation. Questions concerning the Consent Solicitation, or requests for assistance in participating in the Consent Solicitation, should be directed to RBC Dominion Securities Inc. by telephone at 1-416-842-6311 or by email at E-mail: email@example.com.