Cargojet Inc. of Mississauga, ON, has entered into an agreement with a syndicate of underwriters co-led by RBC Capital Markets, CIBC Capital Markets and Scotiabank to raise $100 million. The underwriting banks have purchased listed senior unsecured hybrid debentures due June 30, 2026 – at a price of $1,000 per debenture.
The underwriters also have an option to purchase up to an additional $15 million aggregate principal amount of debentures, on the same terms and conditions, exercisable in whole or in part, for a period of 30 days following closing of the offering. The offering is expected to close on or about July 16, 2020.
The debentures will bear interest at a rate of 5.25 per cent per year and are not redeemable Cargo prior to June 30, 2023. Cargojet states that iot intends to apply the net proceeds of the offering to pay down its revolving credit facility to free up capacity to fund future anticipated capital expenditures, including the purchase of aircraft.
Cargojet states it carries more than 1,300,000 pounds of cargo each business night across its North American network.