MONTREAL, Aug. 27 /CNW Telbec/ - Groupe Aeroplan Inc. (TSX: AER) (the "Corporation") announced today that it has entered into an underwriting agreement with a syndicate of underwriters under which the Corporation will issue $150 million principal amount of 7.9% Senior Secured Notes Series 2 maturing on September 2, 2014 (the "Notes"). The offering of the Notes is expected to close on September 2, 2009, subject to customary closing conditions.

The syndicate of underwriters is led by CIBC World Markets Inc. and TD Securities Inc. and includes RBC Dominion Securities Inc., BMO Nesbitt Burns Inc., National Bank Financial Inc., Scotia Capital Inc. and Dundee Securities Corporation.

The Notes will bear interest at the rate of 7.9% per annum and the interest on the Notes will be payable semi-annually in arrears on March 2 and September 2 of each year, commencing on March 2, 2010. The Notes will be secured by certain present and future undertakings, property and assets of the Corporation and certain of its subsidiaries, and will be direct secured debt obligations of the Corporation ranking equally and pari passu, including with respect to security interests, with all other present and future unsubordinated indebtedness for borrowed money of the Corporation or Aeroplan Canada Inc., as the case may be.

The Notes have been assigned credit ratings of BBB with a stable trend by DBRS Limited and BBB- by Standard & Poors Ratings Services.

Net proceeds from the offering will be used as follows: $100,000,000 for the prepayment of the bank bridge facility entered into on June 12, 2009 and which matures (prior to the exercise of any extension options) on December 19, 2009; $25,000,000 for the repayment of a portion of the amount outstanding under the bank term facility entered into on June 12, 2009; and the balance for general corporate purposes.

The Notes are being offered publicly in Canada pursuant to the Amended and Restated Short Form Base Shelf Prospectus dated March 26, 2009 and a Prospectus Supplement relating to the Notes which will be filed by the Corporation with the securities regulatory authorities in all provinces and territories in Canada.

The Notes have not been and will not be registered under the United States Securities Act of 1933, as amended, and any state securities laws, and may not be offered, sold or delivered within the United States or to, or for the account or benefit of, U.S. persons except in transactions exempt from the registration requirements of the United States Securities Act of 1933 and applicable state securities laws.