Air Canada Issues Unsecured Debentures

Air Canada announced today that it has entered
into an underwriting agreement for a public offering in Canada of $100 million
of senior unsecured debentures. The debentures will mature in June 2006 and
have a coupon of 9.0 per cent. Ratings for the issue are confirmed by Standard
and Poors as BB-, by DBRS as BB (low) and by Moody`s as B1.

The debentures are being offered through a syndicate co-led by National
Bank Financial Inc. and Merrill Lynch Canada Inc. The underwriters have been
granted an option to acquire an additional $100 million principal amount of
senior unsecured debentures under the same terms and conditions until the
filing of the final short form prospectus expected to be no later than
February 19, 2001.

Air Canada will use the net proceeds from the offering to refinance
existing debt and for general corporate purposes.

Air Canada is Canada`s flagship carrier and is recognized as a leader in
the global transportation market. In 2000, Air Canada acquired Canadian
Airlines International, thus becoming the world`s twelfth largest commercial
carrier.

——-

ADVERTISEMENT