Transat will further enhance financial flexibility through new credit facilities " /> Transat A.T. Inc. and National Bank of Canada reach an agreement of financing related to Asset-Backed Commercial Paper: <SPAN style="FONT-WEIGHT: normal">Transat will further enhance financial flexibility through new credit facilities </SPAN>

Transat A.T. Inc. and National Bank of Canada reach an agreement of financing related to Asset-Backed Commercial Paper: Transat will further enhance financial flexibility through new credit facilities

Montreal, June 23, 2008

Transat A.T. Inc. has entered into an agreement with National Bank of Canada (“NBC”) regarding the remaining $143.5 million of its funds blocked in asset-backed commercial paper (ABCP) holdings. Based on the agreement, NBC will provide Transat 3-year credit facilities for up to $107.6 million, or 75% of the nominal amount of Transat's ABCP holdings, through a mix of limited recourse and full recourse credit facilities, renewable annually at the discretion of NBC thereafter up to 4 times.

An aggregate amount of $68.4 million of the credit facilities are limited recourse to the ABCP, with the balance of the credit facilities, namely $39.2 million, being full recourse against Transat.
 
The agreement is subject to usual conditions and to the definitive and final approval of the restructuring plan of the ABCP market before the Courts and its effectiveness and to the execution of a complete, final and unconditional release in favour of NBC against any claim related to the ABCP. Transat has agreed to support the restructuring plan of the ABCP market and to discontinue its appeal of the judgement approving the restructuring plan.

This agreement is in addition to the credit facilities put in place in November 2007 with NBC, which include a 5-year, $150 million unsecured revolving credit facility and a 5-year $60 million secured revolving letter of credit facility.
 
As of April 30, 2008, Transat had cash and cash equivalents of $289.7 million, as well as $196.4 million in trust or otherwise reserved, excluding the funds blocked in ABCP holdings of $143.5 million. To date, Transat has written down 30.2% of its remaining ABCP holdings.

“This agreement further enhances our financial flexibility”, said François Laurin, Vice-President, Finance and Administration and Chief Financial Officer. Transat holds or has access to sufficient available cash to meet all of its financial, operational and regulatory obligations.

About Transat
Transat A.T. Inc. is an integrated international tour operator with more than 60 destination countries and that distributes products in over 50 countries. A holiday travel specialist, Transat operates mainly in Canada and Europe, as well as in the Caribbean, Mexico and the Mediterranean Basin. Montreal-based Transat is also active in air transportation, accommodation, destination services and distribution. (TSX: TRZ.B, TRZ.A)

Caution regarding forward-looking statements
This news release may contain forward-looking statements regarding, without limitations, the Corporation’s financial, operational and regulatory obligations, and the risks related to the repayment of asset-backed commercial paper held by the company. Factors that could lead actual results to differ materially from those contemplated by the forward-looking statements also include general economic conditions, competition, extreme weather conditions, disease outbreaks, war, terrorism, and other risks detailed from time to time in the Corporation’s continuous disclosure documents.

These forward-looking statements, by their nature, necessarily involve risks and uncertainties, many of which are beyond the Corporation's control, that could cause actual results to differ materially from those contemplated by these forward-looking statements. The Corporation considers the assumptions on which these forward-looking statements are based to be reasonable, but cautions the reader that these assumptions regarding future events, many of which are beyond its control, may ultimately prove to be incorrect since they are subject to risks and uncertainties that may affect the Corporation. For additional information with respect to these and other factors, see the Annual Information Form and Annual Report for the year ended October 31, 2006, filed with Canadian securities commissions. The Corporation disclaims any intention or obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, other than as required by law.

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