How is NAV CANADA funded?
Initial Financing: NAV CANADA’s $1.5 billion acquisition of the civil ANS was financed initially by means of a draw down of the Company’s $3 billion syndicated credit facility. Shortly thereafter, in late 1996 and early 1997 NAV CANADA issued $1.5 billion of public bonds to replace the bank financing. This unique financing structure secures the debt not by the assets of the corporation but by its revenue stream. In late 1999, long-term fixed-rate debt was increased to $1.75 billion with the issuance of $250 million of medium term notes. The Company then issued $250 million medium term notes in November 2001 to fund the maturity of one of the 1996 issues. Outstanding debt was increased to $2.2 billion with a $450 million MTN issue in February 2003. Due to the company’s monopoly position in the provision of air traffic services in Canadian-controlled airspace, the cost recovery methodology, and the remedies available for the collection of debt, NAV CANADA’s notes are highly rated by thre
