Amtrak 2014 Annual Report Download - page 38

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National Railroad Passenger Corporation and Subsidiaries (Amtrak)
Notes to Consolidated Financial Statements (continued)
1509-1694994 30
6. Mortgages and Debt (continued)
refund the 2003 PEDFA Garage Bonds outstanding at that time plus accrued and unpaid interest
and to pay other costs of the financing. In FY2013, the Company wrote off $5.7 million of
deferred financing costs related to the original issuance of the 2003 PEDFA Garage Bonds. The
write-off was recognized in the FY2013 Consolidated Statement of Operations as “Loss on early
extinguishment of debt”. The 2012 PEDFA Garage Bonds mature in 20 years, with mandatory
purchase by Amtrak at par plus accrued interest at the end of the seventh year unless an
extension agreement is executed with the commercial bank that holds them. Interest accrues at a
variable one month LIBOR rate. The principal outstanding under the 2012 PEDFA Garage
Bonds was $38.9 million and $40.6 million as of September 30, 2014 and 2013, respectively.
On November 2, 2012, Amtrak also entered into an interest rate swap agreement to manage the
interest cost and risk associated with the 2012 PEDFA Garage Bonds. The notional principal
amount of the swap agreement matches the outstanding bond obligation at the end of every
month. The termination date is November 1, 2019, with an option to extend to November 1,
2032, if Amtrak delivers a notice of exercise prior to October 29, 2019. Under the agreement,
Amtrak pays a fixed interest rate of 1.58% and receives a variable one month LIBOR rate on the
outstanding notional principal amount. As a result, the effective interest rate on the 2012 PEDFA
Garage Bonds is 2.39%.
Amtrak reported capital expenditures of $35.0 million related to the construction of the parking
garage in “Right-of-Way and other properties” in the Consolidated Balance Sheets as of both
September 30, 2014 and 2013.
Term Loan A and Term Loan B
On November 27, 2013, the Company entered into a $130.0 million credit facility with PNC
National Bank, N.A. (the Bridge Loan) to finance the early termination of certain capital leases
(see Note 7). On June 19, 2014, the Company converted the Bridge Loan into a $200.0 million
long-term loan, secured by certain of the Company’ s P-42 diesel locomotives, of which
$130.0 million was financed with PNC Equipment Finance, LLC (Term Loan A) and
$70.0 million was financed with RBS Asset Finance Inc. (Term Loan B). Under the terms of the
agreement for Term Loan A, the Company incurs interest at a rate of LIBOR plus 1.0%. At the
time that Term Loan A was entered into, the Company entered into an interest rate swap
agreement, the impact of which made the effective interest rate on Term Loan A 2.76%. Under
the agreement for Term Loan B, the Company incurs interest at a rate of 3.36%. The Company is
repaying the two term loans in quarterly installments beginning September 20, 2014 and