Air Canada to tap EETC market to fund Dreamliner purchases
TORONTO, March 11 (Reuters) - Air Canada said on Wednesday it will offer three tranches of enhanced equipment trust certificates (EETCs) worth $1.03 billion to fund the purchase of eight new Boeing 787 Dreamliner aircraft.
U.S. carriers have used the EETC market to fund aircraft purchases for the past two decades, but the market was off limits to airlines in Canada until the Canadian government changed the rules late in 2012.
EETCs, a special type of debt financing, ensure that lenders have direct claim over an aircraft in the event that an airline runs into financial trouble. They typically offer lower interest rates than other forms of aircraft financing.
Air Canada, the country's largest airline, said the Boeing 787-9 series aircraft it will purchase with the trust certificates are scheduled for delivery between July 2015 and March 2016.
It said a Boeing 787-8 series plane that was delivered in January 2015 will also be secured by the trust certificates.
Air Canada began to take delivery of the first of 37 Boeing 787 Dreamliner aircraft in the spring of 2014 as it renews its fleet of wide-body aircraft.
The airline first used EETCs in 2013 to finance the purchase of five Boeing 777-300ER series aircraft.
Shares in Air Canada were down 2 Canadian cents at C$12.20 on the Toronto Stock Exchange early on Wednesday. (Reporting by Euan Rocha; Editing by Peter Galloway)
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