Toronto airport authority begins consent bid for obligation bonds, series 1997-C pledged bonds

By Sarah Lizee

Olympia, Wash., July 6 – Greater Toronto Airports Authority (GTAA) called for a meeting of holders of its outstanding series of obligation bonds and the series 1997-C pledged bonds and began a consent solicitation for holders to consider an amendment to the trust indenture governing the bonds.

The proposed amendment would temporarily relieve GTAA from complying with the rate covenant under the trust indenture for its 2020 and 2021 fiscal years, according to a press release.

“The relief is being sought in light of the significant decline in passenger and flight activity at Toronto Pearson International Airport since March 2020 owing to travel restrictions, border closures and other restrictions imposed by governments, and flight and route cancellations by air carriers in response to the Covid-19 pandemic, as well as the economic contraction resulting from the pandemic,” GTAA said in the release.

The meeting is scheduled to be held as a virtual-only meeting at 11 a.m. ET on July 31.

The record date for determining bondholders entitled to vote at the meeting was set as 5 p.m. ET on July 2.

If bondholders representing not less than 66⅔% of the principal amount of all outstanding bonds, including holders of not less than 66⅔% of outstanding debt secured by the series 1997-C pledged bond, deliver valid consents and proxies in favor of the proposed amendment by 5 p.m. ET on July 22, the extraordinary resolution approving the proposed amendment will have been passed and the meeting is expected to be cancelled.

If the extraordinary resolution is passed and GTAA executes a supplemental indenture giving effect to the proposed amendment, GTAA will pay a voting fee of $1.00 for each $1,000 principal amount of bonds to each bondholder who participated in the consent solicitation or voted at the meeting, regardless of whether the holder consented to and voted for, or withheld consent and voted against, the proposed amendment.

However, if the requisite approval is obtained by the election deadline and the meeting is cancelled, no voting fee will be payable to bondholders who did not deliver valid consents and proxies prior to the election deadline.

BMO Capital Markets (416 359-6528) and RBC Dominion Securities Inc. (416 842-6311) are joint solicitation agents, D.F. King Canada (866 822-1240 toll-free, 416 682-3825 collect or inquiries@dfking.com) is the information agent, and AST Trust Co. (Canada) is the tabulation agent.

GTAA is the operator of Toronto Pearson International Airport.

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