Newsrelease

April 27, 1998
Edmonton, Alberta

"I’m pleased with Canadian Airlines' recent success - they've used the Alberta Advantage. They have paid back the outstanding balance of a loan guaranteed by this government and provided us with a return on taxpayer money. Most important of all, Albertans will continue to have a choice at the airline ticket counter."

Refinancing by Canadian Airlines Eliminates Provincial Loan Guarantee

Canadian Airlines completed a US$175 million bond refinancing on April 24, 1998, and repaid the $27 million loan guarantee package, involving the provincial governments of Alberta and British Columbia and the Government of Canada. This refinancing eliminated Alberta’s liability under the guarantee.

The Alberta government did not lose any money on this loan guarantee. In fact, since 1992 the province has collected a total of $478,632 in fees for this guarantee.

"I’m always thrilled when we take another step towards getting completely out of the business of business," said Provincial Treasurer Stockwell Day. "Canadian’s continuing success is another signal that our economy is moving forward."

Alberta approved a $50 million loan guarantee to support Canadian Airlines in December 1992. The federal government guaranteed an additional $50 million, while British Columbia guaranteed $20 million for a total of $120 million.

Canadian was paying back the loan in $10 million quarterly instalments until the fall of 1996 when the company announced a need to restructure its finances. As of June 30, 1997, Canadian had agreed to repay the remaining balance of the guaranteed loans - Alberta’s portion was $12 million - in 10 quarterly instalments, starting in October 1998 and ending January 1, 2001.

For more information, please contact:

Trish Filevich
Director of Communications
Alberta Treasury
Telephone (780) 427-5364
e-mail: webmaster@treas.gov.ab.ca

Stockwell Day
Provincial Treasurer
(780) 427-8809

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