Alcoa 2009 Annual Report Download - page 113

early $56 (R$97) and $19 (R$33) of outstanding borrowings related to the subloans totaling $257 (R$600) and the
subloans totaling $64 (R$150), respectively.
The second loan agreement provides for a commitment of $86 (R$200), which is divided into four subloans, and is
being used to pay for certain expenditures of the São Luís refinery expansion. Interest on two of the subloans totaling
$69 (R$160) is a U.S. dollar rate of interest equal to the average cost incurred by BNDES in raising capital outside of
Brazil plus a weighted-average margin of 1.70%. Interest on two of the subloans totaling $17 (R$40) is a Brazil real
rate of interest equal to BNDES’ long-term interest rate plus a weighted-average margin of 1.70%. As of December 31,
2009, Alumínio’s outstanding borrowings were $33 (R$58) and $11 (R$19) and the weighted-average interest rate was
5.95% and 7.70% for the subloans totaling $69 (R$160) and the subloans totaling $17 (R$40), respectively.
Principal and interest on the Second Loans are payable monthly beginning in November 2010 and ending in April
2016. Prior to November 2010, interest is payable quarterly on borrowed amounts. The Second Loans may be repaid
early without penalty with the approval of BNDES. Also, the Second Loans include a financial covenant that states that
Alcoa must maintain a debt-to-equity ratio of 1.5 or lower.
2008 Activity—In March 2008, Alumínio entered into two separate loan agreements (the “First Loans”) with BNDES
related to the Juruti bauxite mine development and the São Luís refinery expansion.
The first loan agreement provides for a commitment of $248 (R$500), which is divided into five subloans, and were
used to pay for certain expenditures of the Juruti bauxite mine development. Interest on four of the subloans totaling
$233 (R$470) is a Brazil real rate of interest equal to BNDES’ long-term interest rate, 6.00% and 6.25% as of
December 31, 2009 and 2008, respectively, plus a weighted-average margin of 2.13%. Interest on the fifth subloan of
$15 (R$30) is a U.S. dollar rate of interest equal to the average cost incurred by BNDES in raising capital outside of
Brazil, 4.25% and 4.46% as of December 31, 2009 and 2008, respectively, plus a margin of 2.40%.
Principal and interest are payable monthly beginning in September 2009 and ending in November 2014 for the four
subloans totaling $233 (R$470) and beginning in November 2009 and ending in January 2015 for the subloan of $15
(R$30). Prior to these dates, interest is payable quarterly on borrowed amounts.
As of December 31, 2009, Alumínio’s outstanding borrowings were $253 (R$442) and $15 (R$25) and the weighted-
average interest rate was 8.13% and 6.65% for the subloans totaling $233 (R$470) and the subloan of $15 (R$30),
respectively. During 2009, Alumínio repaid $17 (R$30) of outstanding borrowings related to the subloans totaling $233
(R$470). As of December 31, 2008, Alumínio’s outstanding borrowings were $181 (R$433) and $15 (R$36) and the
weighted-average interest rate was 8.38% and 6.86% for the subloans totaling $233 (R$470) and the subloan of $15
(R$30), respectively.
The second loan agreement provides for a commitment of $374 (R$650), which is divided into three subloans, and
were used to pay for certain expenditures of the São Luís refinery expansion. Interest on two of the subloans totaling
$339 (R$589) is a Brazil real rate of interest equal to BNDES’ long-term interest rate plus a weighted-average margin
of 1.99%. Interest on the third subloan of $35 (R$61) is a U.S. dollar rate of interest equal to the average cost incurred
by BNDES in raising capital outside of Brazil plus a margin of 2.02%.
Principal and interest are payable monthly beginning in December 2009 and ending in February 2015 for the two
subloans totaling $339 (R$589) and beginning in February 2010 and ending in April 2015 for the subloan of $35
(R$61). Prior to these dates, interest is payable quarterly on borrowed amounts.
As of December 31, 2009, Alumínio’s outstanding borrowings were $334 (R$581) and $35 (R$61) and the weighted-
average interest rate was 7.99% and 6.27% for the subloans totaling $339 (R$589) and the subloan of $35 (R$61),
respectively. During 2009, Alumínio repaid $5 (R$9) of outstanding borrowings related to the subloans totaling $339
(R$589). As of December 31, 2008, Alumínio’s outstanding borrowings were $218 (R$522) and $32 (R$78) and the
weighted-average interest rate was 8.24% and 6.48% for the subloans totaling $339 (R$589) and the subloan of $35
(R$61), respectively.
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