Chrysler 2011 Annual Report Download - page 214

213
Consolidated
Financial Statements
at 31 December 2011
The bonds issued by the Fiat Group excluding Chrysler are governed by different terms and conditions according to their type as follows:
Global Medium Term Note (GMTN Programme): a maximum of €15 billion may be used under this Program, of which notes of approximately €7.7 billion
have been issued to date; the Program is guaranteed by Fiat S.p.A. The issuers taking part in the program include, amongst others, Fiat Finance and
Trade Ltd. S.A. for an amount outstanding of €6.7 billion and Fiat Finance North America Inc. with a bond having a nominal value of €1 billion.
Other bonds: these refer to a bond issued by Fiat Finance and Trade Ltd. S.A. having a nominal value of €1 billion, issued at par, bearing fixed interest
at 6.625% and repayable on 15 February 2013.
The Fiat Group intends to repay the bonds issued by Fiat Finance and Trade Ltd S.A. and by Fiat Finance North America Inc. in cash at maturity by utilising
available liquid resources. In addition, the companies in the Fiat Group may from time to time buy back bonds on the market that have been issued by the
Group, also for purposes of their cancellation. Such buybacks, if made, depend upon market conditions, the financial situation of the Group and other
factors which could affect such decisions.
Chrysler may redeem, at any time, all or any portion of the Secured Senior Notes on not less than 30 and not more than 60 days’ prior notice mailed to the
holders of the Notes to be redeemed.
Prior to 15 June 2015, the 2019 Notes will be redeemable at a price equal to the principal amount of the 2019 Notes being redeemed, plus accrued and
unpaid interest to the date of redemption and a “make−whole” premium calculated under the indenture. At any time prior to 15 June 2014, Chrysler may
also redeem up to 35% of the aggregate principal amount of the 2019 Notes, at a redemption price equal to 108 percent of the principal amount of the 2019
Notes being redeemed, plus accrued and unpaid interest to the date of redemption with the net cash proceeds from certain equity offerings. On and after
June 15, 2015, the 2019 Notes are redeemable at redemption prices specified in the indenture, plus accrued and unpaid interest to the date of redemption.
The redemption price is initially 104 percent of the principal amount of the 2019 Notes being redeemed for the twelve months beginning 15 June 2015,
decreasing to 102 percent for the year beginning June 15, 2016 and to par on and after 15 June 2017.
Prior to 15 June 2016, the 2021 Notes will be redeemable at a price equal to the principal amount of the 2021 Notes being redeemed, plus accrued and
unpaid interest to the date of redemption and a “make−whole” premium calculated under the indenture. At any time prior to 15 June 2014, Chrysler may
also redeem up to 35% of the aggregate principal amount of the 2021 Notes, at a redemption price equal to 108.25 percent of the principal amount of
the 2021 Notes being redeemed, plus accrued and unpaid interest to the date of redemption with the net cash proceeds from certain equity offerings. On
and after 15 June 2016, the 2021 Notes are redeemable at redemption prices specified in the indenture, plus accrued and unpaid interest to the date of
redemption. The redemption price is initially 104.125 percent of the principal amount of the 2021 Notes being redeemed for the twelve months beginning
15 June 2016, decreasing to 102.75 percent for the year beginning 15 June 2017, to 101.375 percent for the year beginning 15 June 2018 and to par on
and after 15 June 2019.
The prospectuses and offering circulars, or their abstracts, relating to the principal bond issues are available on the Group’s website at www.fiatspa.com
under “Investor Relations – Financial Reports” and at www.chryslergroupllc.com under “Investor Relations – SEC filings”. These documents are unaudited.
The bonds issued by Fiat Finance and Trade ltd. S.A. and by Fiat Finance North America Inc. impose covenants on the issuer and, in certain cases, on
Fiat S.p.A. as guarantor, which is standard international practice for similar bonds issued by companies in the same industry sector as the Group. Such
covenants include: (i) negative pledge clauses which require that bonds benefit from any existing or future pledges of assets of the issuer and/or Fiat S.p.A.
granted in connection with other bonds or debt securities having the same ranking; (ii) pari passu clauses, under which no obligations ranking senior to the
bonds in question may be assumed; (iii) periodic disclosure obligations; (iv) for bond issued under the Global Medium Term Notes programme, cross-default
clauses which require immediate repayment of the bonds under certain events of default on other financial instruments issued by the Group’s main entities;
and, (v) other clauses that are generally applicable to securities of a similar type. A breach of these covenants can lead to the early repayment of the notes.
In addition, the agreements for the bonds guaranteed by Fiat S.p.A. contain clauses which could lead to requirement to make early repayment if there is a
change of the controlling shareholder of Fiat S.p.A. which leads to a resulting downgrading by the ratings agencies.
In addition, the indenture of the Secured Senior Notes issued by Chrysler Group LLC includes negative covenants related to Chrysler’s ability and, in certain
instances, the ability of certain of its subsidiaries to, (i) pay dividends or make distributions on the Company’s capital stock or repurchase the Company’s
capital stock; (ii) make restricted payments; (iii) create certain liens to secure indebtedness; (iv) enter into sale and leaseback transactions; (v) engage in
transactions with affiliates; (vi) merge or consolidate with certain companies and (vii) transfer and sell assets.