Chrysler 2013 Annual Report Download - page 237

236 Consolidated
Financial Statements
at 31 December 2013
Notes
In connection with the term loan facilities, Chrysler Group borrowed (1) an additional $250 million of term loans under its existing senior
secured credit facilities maturing 24 May 2017, under which Chrysler Group borrows at 2.75% over LIBOR, subject to a LIBOR floor of
0.75%; and (2) $1.75 billion of term loans under a new senior secured term loan facility maturing 31 December 2018, at 2.50% over LIBOR,
subject to a LIBOR floor of 0.75%.
The refinancing transactions are expected to result in yearly interest expense savings, for the period from 2014 to 2016, of approximately
$134 million.(1)
On 11 February, Moody’s Investors Service lowered Fiat S.p.A.’s Corporate Family Rating from ‘Ba3’ to ‘B1’ and consequently, in
accordance with their methodology, ratings on the notes issued by Fiat Finance & Trade Ltd. S.A. and Fiat Finance North America Inc. were
also lowered from ‘B1’ to ‘B2’.
27 February 2014
On behalf of the Board of Directors
/s/ John Elkann
John Elkann
CHAIRMAN
(1) For the purposes of Chrysler Group consolidated financial statements (prepared in accordance with US GAAP) the refinancing transactions are expected to result in yearly
interest expense savings, for the period from 2014 to 2016, of approximately $200 million including the elimination of the non-cash VEBA Trust Note discount amortization
of approximately $65 million per annum. In addition, for the same reason, Chrysler Group expects to record a non-cash charge of approximately $500 million in connection
with the repayment of the VEBA Trust Note. For the purposes of its consolidated financial statements (prepared in accordance with IFRS) Fiat Group expects to record
interest expense savings lower than those recorded by Chrysler Group and to report no non-cash charges in connection with the repayment of the VEBA Trust Note, which
has been carried at face value as a result of the purchase accounting related to the acquisition of control and consolidation of Chrysler Group in May 2011.