Airtran 2009 Annual Report Download - page 94

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We placed approximately $12.2 million of the proceeds of the offering in an escrow account with the trustee.
Funds in the escrow account are invested in government securities and are being used to make the first six
scheduled semi-annual interest payments on the 5.5% convertible notes, and these payments are secured by a
pledge of the assets in escrow. Holders who convert their notes prior to April 15, 2011 will receive, in addition
to a number of shares of our common stock calculated based on the conversion rate, the cash proceeds from the
sale by the escrow agent of that portion of government securities in the escrow account that relate to the
applicable holder’s 5.5% convertible notes being converted.
During the fourth quarter of 2008, $5.3 million of the 5.5% convertible notes were converted to 1.4 million
shares of our common stock and $0.7 million was paid from the escrow account to the former note holders.
5.25% Convertible Senior Notes
In October 2009, we completed a public offering of $115.0 million of our convertible senior notes due in 2016,
which we refer to as the 5.25% convertible notes. The net proceeds from the offering were used for general
corporate purposes including improving our overall liquidity by providing working capital. Such notes bear
interest at 5.25 percent payable semi-annually, in arrears, on May 1 and November 1. The 5.25% convertible
notes are senior unsecured obligations of Holdings and rank equally with all existing and future senior
unsecured obligations of Holdings. The 5.25% convertible notes are effectively subordinated to all liabilities of
our subsidiaries. The 5.25% convertible notes are convertible into shares of our common stock at a conversion
rate of 164.0420 shares per $1,000 in principal amount of such notes which equals an initial conversion price of
approximately $6.10 per share. This conversion rate is subject to adjustment in certain circumstances. Holders
may convert their 5.25% convertible notes into shares of our common stock at their option at any time. The
5.25% convertible notes are not redeemable at our option prior to maturity. The holders of the 5.25%
convertible notes may require us to repurchase such notes, in whole or in part, for cash upon the occurrence of a
fundamental change, as defined in the governing supplemental indenture, at a repurchase price of 100 percent of
principal amounts plus any accrued and unpaid interest.
Credit Facility
In July 2008, Airways, obtained a letter of credit facility which provided for a financial institution to issue
letters of credit. Such letter of credit facility was amended and restated in October 2008 to, among other things,
provide Airways with a revolving line of credit. We generally refer to the combined letter of credit facility and
revolving line of credit facility as a whole as the Credit Facility, and we generally refer to its components as the
letter of credit facility and the revolving line of credit facility, respectively.
The following discussion summarizes the terms of the Credit Facility as amended in September 2009. Under
the revolving line of credit facility we are permitted to borrow, upon two (2) business days notice, until
December 31, 2010 (the Expiration Date), up to $125 million for general corporate purposes. Under the letter of
credit facility, we are entitled to the issuance by a financial institution, until 30 days prior to the Expiration
Date, of letters of credit for the benefit of one or more of our credit card processors. The aggregate amount of
outstanding letters of credit under the letter of credit facility plus the outstanding amount borrowed under the
revolving line of credit facility is not permitted to exceed an aggregate of $175 million. Amounts borrowed
under the revolving line of credit facility bear interest at a rate of 12 percent per annum and must be repaid
within three (3) business days to the extent that our aggregate unrestricted cash and investment amount exceeds
$405 million at any time. We are also required to pay a facility fee, letter of credit fees and fees on undrawn
amounts under the revolving line of credit facility. We may borrow once a month and are permitted to repay
amounts borrowed at any time without penalty. As of December 31, 2008, December 31, 2009 and February 1,
2010, we had $90 million, $125 million and $0 outstanding borrowings under the revolving line of credit