Air Canada/Caisse De Dépôt et Placement Du Québec

Air Canada and the Caisse de dépôt et placement du Québec announced on December 17, 1999 that Air Canada had issued a $150 million convertible unsecured subordinated debenture maturing in November 2009 as part of a facility under which Air Canada has the option to issue up to a further $150 million of debentures. Interest on the debenture will be payable quarterly at a rate of 7.25 per cent per year.

The debentures are convertible at the option of the Caisse into Air Canada Common Shares (to the maximum limit permitted by the law) and the balance into Class A Shares at a 20 per cent premium above the weighted average trading price for the Common Shares over a 20 trading-day period beginning December 28, 1999. The weighted average trading price used for these purposes, before giving effect to the conversion premium, will be subject to a minimum of $13.33 and a maximum of $15.

At maturity, Air Canada will have the right to repay these debentures in cash or by issuing Common Shares or Class A Shares at the option of the Company. After the fourth anniversary following the issuance of the debentures, Air Canada may call all or any portion of the debentures for redemption in accordance with their terms.

The Caisse relied on Claude Bergeron, its Vice-President of legal affairs, who called upon the Montreal office of Fasken Martineau DuMoulin. Stikeman Elliott acted for Air Canada. The Fasken Martineau DuMoulin team was comprised of Bernard Bussières, Claude Gendron, Robert Paré, Caroline Thomassin, Christine Malenfant and Lise Rochette. The Stikeman Elliott team was comprised of Calin Rovinescu, Edward B. Claxton, Olivier Giner and Jean Farley.