http://www.newswire.ca/en/releases/a.../03/c7974.html

MONTREAL, Aug. 3 /CNW Telbec/ - Air Canada announced today that it has completed its previously announced private offerings of senior secured notes, consisting of US$600 million principal amount of 9.25% senior secured first lien notes due 2015, C$300 million principal amount of 10.125% senior secured first lien notes due 2015, and US$200 million principal amount of 12% senior secured second lien notes due 2016.

Air Canada received net proceeds of C$1,075 million, after deduction of fees, expenses and discounts. Air Canada used approximately C$729 million of the net proceeds of the offerings to repay all of the outstanding debt under the secured term credit facility, including early payment fees.

The notes have not been registered under the Securities Act of 1933, as amended (the "Securities Act"), and may not be offered or sold in the United States without registration or an applicable exemption from the registration requirements of the Securities Act. The notes have not been and will not be qualified for sale to the public under applicable Canadian securities laws and any offer and sale of the notes in Canada will be made on a basis that is exempt from the prospectus requirement of such securities laws. This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the notes in any jurisdiction in which such offer, solicitation or sale would be unlawful.

The notes were offered and sold in the United States only to qualified institutional buyers in accordance with Rule 144A under the Securities Act and outside the United States in accordance with Regulation S under the Securities Act. In Canada, the notes were offered and sold on a private placement basis to accredited investors in certain provinces of Canada.