Canadian plane maker Bombardier has launched a consent solicitation with respect to eight of its outstanding senior bonds/debentures after it received a letter from a holder of its 2034s claiming that its “divestitures of non-core assets, including its transportation business, regional jet program and aerostructures division (the “Transactions”), constitute a breach of certain covenants under the indenture governing the 2034 Notes.” The Montreal headquartered company that had sold its transportation business to Alstom in January this year has denied the allegations and looks at amending the applicable indenture through the latest consent solicitation. The consent seeks to “clarify that the Transactions are permitted by the applicable indenture” and to “avoid doubt” in connection with the default waiver related to Transactions. Bombardier is offering a consent payment of $1.25 per $1,000 principal amount for the USD notes and CAD 1.25 per CAD 1,000 principal amount for the 7.35% 2026 debentures.
In related news, Bombardier also announced the preliminary results for 1Q2021 where business jet revenues are expected to be up 13% YoY at $1.3bn with EBIT and EBITDA from continuing operations expected at $19mn and $123mn, down 82% and up 43% respectively vs. the same quarter last year.
Bombardier’s 5.75% 2022s and 7.45% 2034s, both a part of the consent solicitation, were up 1.28 and 3.33 to trade at 103.5 and 106.33 respectively.
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