Transat A.T. Inc. - Status of cash holdings and short-term investments



    TRZ.B; TRZ.A (TSX)

    MONTREAL, Aug. 22 /CNW Telbec/ - In light of the current disruption of
credit markets, particularly asset-backed commercial paper (ABCP), Transat
A.T. Inc. provides the following update on the status of its cash holdings and
short-term investments. Excluding cash in trust or otherwise reserved, Transat
A.T. Inc. had a total available cash position of approximately $340 million as
of August 20, 2007, including $154.5 million invested in ten different ABCP
trusts, certain of which are managed by Coventree Capital Group Inc. Despite
liquidity concerns related to ABCP products, Transat has sufficient cash
available to meet all of its financial, operational and regulatory
obligations.
    Cash in trust, representing deposits from customers, as well as the
remaining $185 million of available cash, are either held as cash or invested
in highly rated liquid instruments (mainly cash and term deposits) with a
broad range of large financial institutions, and have no exposure whatsoever
to the current asset-backed commercial paper market disruption.
    Over 90% of Transat's ABCP investments are in trusts rated R1-High by
Dominion Bond Rating Service (DBRS) - the highest credit quality - and are
therefore supported by liquidity facilities that are intended to protect
investors from a market disruption. Transat understands that certain banks
providing such liquidity facilities may have so far refused to provide the
requested funding. The said asset-backed commercial paper are securities that
met the criteria of Transat's investment policy and were purchased on the
basis of professional advice from National Bank of Canada. Maturity dates go
from August 21, 2007 to January 29, 2008, and repayments in the amount of
$15 million, due August 21, have not been repaid.
    DBRS has placed several ABCP issuers "Under Review with Developing
Implications" following the announcement on August 16, 2007, that a consortium
representing banks, asset providers and major investors had agreed in
principle to a long term proposal and an interim agreement regarding third
party asset-backed commercial paper. The effect of this would, among other
things, be to convert ABCP into term floating rate notes maturing no earlier
than the scheduled termination dates of the underlying assets. Transat is in
discussion with its bank and the trust managers, and is closely monitoring the
situation.

    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, destination
services and distribution. (TSX: TRZ.B, TRZ.A)

    Transat will hold a conference call for financial analysts, investors and
media representatives, today August 22, 2007 at 9.00 a.m. Dial 1-866-696-5910
or 514-861-2255. Name of conference: Transat. The archived call will be
available at 1-800-408-3053 or 514-861-2272 access code 3233001 pound sign,
until August 29, 2007.

    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.
    %SEDAR: 00002758EF




For further information:

For further information: for media representatives: Jean-Michel Laberge,
(514) 908-4499; for financial analysts: François Laurin, Vice-President,
Finance and Administration and Chief Financial Officer, (514) 987-1660;
Source: Transat A.T. Inc.; www.transat.com


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