Airtran 2005 Annual Report Download - page 20

We entered into the second permanent facility in September 2004, pursuant to which we financed the acquisition of three additional B737 aircraft. We took delivery of such aircraft in September 2004, June 2005 and
January 2006, respectively. In conjunction with the financing of these B737 aircraft, we issued equipment notes as aircraft were delivered for an aggregate amount of $85.5 million, which are scheduled to mature
between September 2016 and January 2018. The notes bear interest at a floating rate per annum above the six-month U.S. Dollar LIBOR in effect at the commencement of each semiannual period, and payments of
principal and interest under the notes are payable semiannually. Each note is secured by a first mortgage on the aircraft to which it relates, valuing at approximately $63.7 million as of December 31, 2005.
We entered into the third permanent facility in September 2005, pursuant to which we shall be entitled to borrow up to $354 million for purposes of acquiring 12 B737 aircraft currently scheduled to be delivered to
us in 2006 and 2007 and satisfying our repayment obligations under a related pre-delivery payment financing facility, which is described in more detail below. On the delivery date of each aircraft subject to this
third permanent facility, we will issue equipment notes evidencing the loans made under this permanent facility for that aircraft. The equipment notes will mature on the twelfth anniversary of the delivery date of
the aircraft to which such notes relate and will be secured by the aircraft to which such loans relate. We intend to obtain a loan in respect of the first aircraft subject to this permanent facility during May 2006.
On February 14, 2006, we entered into a fourth permanent facility, pursuant to which we shall be entitled to borrow up to $58 million for purposes of acquiring two B737 aircraft on their respective delivery dates. We
obtained a loan under this fourth permanent facility on February 14, 2006 for purposes of acquiring the first of the aircraft subject to this facility. In connection with the financing of that aircraft, we issued an equip-
ment note for $29 million. The note is scheduled to mature during February 2018. The note bears interest at a floating rate per annum above the six-month LIBOR, and payments of principal and interest under the
note are payable semiannually. We intend to obtain a loan in respect of the second aircraft subject to this facility during March 2006.
:: PRE-DELIVERY PAYMENT FINANCINGS : :
Through December 31, 2005, we have entered into three separate facilities (each a “PDP facility”) for purposes of financing our obligations to make pre-delivery payments in respect of B737 aircraft on order with an
aircraft manufacturer.
During May 2005, we closed the first PDP facility, “PDP-1,” pursuant to which we were entitled to draw an amount equal to $19.6 million to fund a portion of our obligations to make pre-delivery payments in respect
of six B737 aircraft scheduled to be delivered through March 2006. Drawings made under PDP-1 bear interest at a floating rate per annum above the one-month U.S. Dollar LIBOR. PDP-1 is secured by certain rights
under our purchase agreement with an aircraft manufacturer for the six B737 aircraft. As of December 31,2005, PDP-1 was fully drawn and $9.9 million was outstanding thereunder. All outstanding amounts related
to PDP-1 will have been repaid prior to delivery of the last of the six aircraft in March 2006.
On September 1, 2005, we closed the second PDP facility, “PDP-2,” pursuant to which we are entitled to draw amounts sufficient to fund all of our obligations to make pre-delivery payments in respect of 12 B737
aircraft currently scheduled to be delivered in 2006 and 2007. PDP-2 was entered into in conjunction with the September 2005 permanent facility for $354 million as described above. Drawings made under PDP-2
bear interest at a floating rate per annum above the one-month U.S. Dollar LIBOR. PDP-2 is secured by certain rights under our purchase agreement with an aircraft manufacturer for the 12 B737 aircraft. As of
December 31, 2005, $57.2 million is outstanding under PDP-2, which is equivalent to pre-delivery payments due and paid by us to the aircraft manufacturer for the 12 B737 aircraft through such date. We intend to
make additional drawings under PDP-2 for approximately $264.2 million through February 2006, at which time our deposit requirements for the 12 aircraft will be met.
On December 7, 2005, we closed the third PDP facility, “PDP-3,” pursuant to which we are entitled to draw amounts up to $65 million to fund a portion of our obligations to make pre-delivery payments in respect of
19 B737 aircraft currently scheduled to be delivered in 2007 and 2008. Drawings made under PDP-3 bear interest at a floating rate per annum above the one-month U.S. Dollar LIBOR. PDP-3 is secured by certain
rights under our purchase agreement with an aircraft manufacturer for the 19 B737 aircraft. As of December 31, 2005, $20.0 million is outstanding under PDP-3. We intend to make additional drawings under
PDP-3 for approximately $45 million, through April 2007, at which time the deposit requirements for the 19 aircraft will have been met.
:: ::
18