Chrysler 2014 Annual Report Download - page 91

2014 | ANNUAL REPORT 89
The bonds issued by Fiat Chrysler Finance Europe S.A. (formerly known as Fiat Finance and Trade Ltd S.A.) and
by Fiat Chrysler Finance North America Inc. (formerly known as Fiat Finance North America Inc.) impose covenants
on the issuer and, in certain cases, on FCA as guarantor, which include: (i) negative pledge clauses which require
that, in case any security interest upon assets of the issuer and/or FCA is granted in connection with other bonds or
debt securities having the same ranking, such security should be equally and ratably extended to the outstanding
bonds; (ii) pari passu clauses, under which the bonds rank and will rank pari passu with all other present and future
unsubordinated and unsecured obligations of the issuer and/or FCA; (iii) periodic disclosure obligations; (iv) 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 may require the early repayment of the notes. In addition, the agreements
for the bonds guaranteed by FCA contain clauses which could require early repayment if there is a change of the
controlling shareholder of FCA leading to a resulting a ratings downgrade by ratings agencies.
FCA US Secured Senior Notes
FCA US 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 Secured Senior Notes to be redeemed.
Prior to June 15, 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 governing these notes. On and after June 15, 2015, the 2019 Notes are redeemable
at redemption prices specified in the 2019 Notes, plus accrued and unpaid interest to the date of redemption. The
redemption price is initially 104.0 percent of the principal amount of the 2019 Notes being redeemed for the twelve
months beginning June 15, 2015, decreasing to 102.0 percent for the twelve months beginning June 15, 2016 and
to par on and after June 15, 2017.
Prior to June 15, 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 governing these notes. On and after June 15, 2016, the 2021 Notes are redeemable
at redemption prices specified in the 2021 Notes, 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 June 15, 2016, decreasing to 102.750 percent for the twelve months beginning June 15,
2017, to 101.375 percent for the twelve months beginning June 15, 2018 and to par on and after June 15, 2019.
The indenture governing the Secured Senior Notes issued by FCA US includes affirmative covenants, including
the reporting of financial results and other developments. The indenture also includes negative covenants which
limit FCA US’s ability and, in certain instances, the ability of certain of its subsidiaries to, (i) pay dividends or make
distributions of FCA US’s capital stock or repurchase FCA US’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. The indenture provides
for customary events of default, including but not limited to, (i) non-payment; (ii) breach of covenants in the indenture;
(iii) payment defaults or acceleration of other indebtedness; (iv) a failure to pay certain judgments and (v) certain events
of bankruptcy, insolvency and reorganization. If certain events of default occur and are continuing, the trustee or the
holders of at least 25.0 percent in aggregate of the principal amount of the Secured Senior Notes outstanding under
one of the series may declare all of the notes of that series to be due and payable immediately, together with accrued
interest, if any. As of December 31, 2014, FCA US was in compliance with all covenants.
The Secured Senior Notes are secured by security interests junior to the Senior Credit Facilities (as defined below) in
substantially all of FCA US’s assets and the assets of its U.S. subsidiary guarantors, subject to certain exceptions. The
collateral includes 100.0 percent of the equity interests in FCA US’s U.S. subsidiaries and 65.0 percent of the equity
interests in certain of its non-U.S. subsidiaries held directly by FCA US and its U.S. subsidiary guarantors.