Air Canada 2008 Annual Report Download - page 109

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Consolidated Financial Statements and Notes
109
6. LONG-TERM DEBT AND CAPITAL LEASES
Base
Currency
Final
Maturity
Stated
Interest
Rate %
2008 2007
Embraer aircraft financing (a) USD 2017 - 2021 3.37 - 8.49 $ 1,425 $ 1,138
Boeing aircraft financing (b) USD 2019 - 2020 1.50 - 5.69 871 647
Boeing aircraft financing (c) JPY 2020 1.04 - 1.20 270 -
Conditional sales agreements (d) USD 2019 4.37 - 6.44 175 149
Spare engine financing (e) USD 2013 5.13 95 -
Spare parts financing (f) USD 2014 6.97 97 -
Lufthansa cooperation agreement (g) USD 2009 6.50 16 25
GE loan (h) USD 2015 4.60 24 38
Revolving credit facility (i) CDN 50 -
Canadian Regional Jet (j) CDN 2012 4.38 25 33
Short-term loan due 2009 (k) USD 2009 6.45 190 -
DirectCorporationdebt 3,238 2,030
Boeing pre-delivery payments (l) USD 2009-2013 1.61 81 521
Aircraft and engine leasing entities - debt (m) 828 771
Fuel facility corporations - debt (n) 125 125
DebtconsolidatedunderAcG-15 1,034 1,417
Capital lease obligations (o) 1,082 972
Totaldebtandcapitalleases 5,354 4,419
Current portion (663 ) (413 )
Long-termdebtandcapitalleases $ 4,691 $ 4,006
The Stated Interest Rate in the table above is the rate as of December 31, 2008
(a) Embraer aircraft financing amounts to US$1,163 as at December 31, 2008 (2007 - US$1,151). Principal and interest
is repaid quarterly until maturity. The loan is secured by the 60 delivered Embraer aircraft, with a carrying value of
$1,665.
(b) Boeing aircraft financing amounts to US$711 as at December 31, 2008 (2007 - US$655), which is financed under
loan guarantee support provided by EXIM. Principal and interest is repaid quarterly until maturity. The loan is
secured by the 8 delivered aircraft with a carrying value of $1,103.
(c) Boeing aircraft financing amounts to JPY19,995 as at December 31, 2008, which is financed under loan guarantee
support provided by EXIM. Principal and interest is repaid quarterly until maturity. The loan is secured by the 2
delivered aircraft with a carrying value of $244.
(d) US$142 principal outstanding on acquisitions of two A340-500 aircraft financed through conditional sales
agreements. Principal and interest is paid quarterly until maturity in 2019. The purchase price installments bear
interest at a three month LIBOR rate plus 2.9% (4.37% - 6.44% as at December 31, 2008 and 7.74% - 7.97% as at
December 31, 2007). The carrying value of the two A340-500 aircraft provided as security under the conditional
sales agreements is $238 as at December 31, 2008.
(e) US$78 principal outstanding to mature in 2013, with quarterly repayments and a final payment at maturity of 50%
of the original principal, at a floating interest rate equal to the three month LIBOR rate plus 3.40%. The loan is
secured by 10 spare engines with a carrying value of $121.
The loan agreement contains a current market value test, beginning on the first anniversary of the facility, and
annually thereafter until expiry. This test relates to 10 engines and under the test, the Corporation may be required
to provide additional collateral or prepay certain facility amounts, based on engine current market values, as of the
date of the test. Any amounts prepaid would be recorded as a reduction of the loan. The maximum amount payable
on the first anniversary, assuming the engines are worth nil and no additional collateral has been provided, is $86
(US$71). This amount declines over time to fifty percent of the original principal upon the loan expiry. In January