Chrysler 2014 Annual Report Download - page 92

90 2014 | ANNUAL REPORT
Operating Results
Bank Debt
Bank debt principally comprises amounts due under (i) the senior credit facilities of FCA US (€4.0 billion at December
31, 2014 and €2.1 billion at December 31, 2013), (ii) financial liabilities of the Brazilian operating entity (€4.7 billion
at December 31, 2014 and €2.9 billion at December 31, 2013) relating to a number of financing arrangements, also
with certain Brazilian development banks, primarily used to support capital expenditure, including in our new plant
in the State of Pernambuco as well as to fund the financial services business in that country, (iii) loans provided by
the European Investment Bank (€1.0 billion at December 31, 2014 and €1.1 billion at December 31, 2013) to fund
our investments and research and development costs, (iv) amounts drawn down by FCA excluding FCA US treasury
companies under short and medium term credit facilities (€1.4 billion at December 31, 2014 and €1.1 billion at
December 31, 2013) and (v) amounts outstanding relating to financing arrangements of Chrysler de Mexico with
certain Mexican development banks, amounting to €0.4 billion at December 31, 2014 and 2013.
The main terms and conditions of the principal bank facilities are described as follows.
FCA US Senior Credit Facilities
The Tranche B Term Loan due 2017 of FCA consists of the existing U.S.$3.0 billion tranche B term loan (€2,471
million) that matures on May 24, 2017, or the Original Tranche B Term Loan, and an additional U.S.$250 million (€206
million at December 31, 2014) term loan entered into on February 7, 2014 under the Original Tranche B Term Loan
that also matures on May 24, 2017, collectively the Tranche B Term Loan due 2017. The Original Tranche B Term
Loan was re-priced in June and in December 2013 and subsequently, all amounts outstanding under Tranche B Term
Loan due 2017 will bear interest at FCA’s option at either a base rate plus 1.75 percent per annum or at LIBOR plus
2.75 percent per annum, subject to a base rate floor of 1.75 percent per annum or a LIBOR floor of 0.75 percent per
annum. For the year ended December 31, 2014, interest was accrued based on LIBOR. The outstanding principle
amount of the Tranche B Term Loan due 2017 is payable in equal quarterly installments of U.S.$8.1 million (€6.7
million) commencing on March 2014, with the remaining balance due at maturity in May 2017. The Tranche B Term
Loan due 2017 was fully drawn and a total of €2,587 million (including accrued interest) was outstanding at December
31, 2014 (€2,119 million including accrued interest at December 31, 2013).
On February 7, 2014, FCA US entered into a new U.S.$1,750 million (€1.3 billion) tranche B term loan issued under
a new term loan credit facility, or the Tranche B Term Loan due 2018, that matures on December 31, 2018. The
outstanding principal amount of the Tranche B Term Loan due 2018 is payable in quarterly installments of U.S.$4.4
million (€3.6 million), commencing June 30, 2014, with the remaining balance due at maturity. The Tranche B Term
Loan due 2018 bears interest, at FCA US’s option, either at a base rate plus 1.50 percent per annum or at LIBOR
plus 2.50 percent per annum, subject to a base rate floor of 1.75 percent per annum or a LIBOR floor of 0.75 percent
per annum. At December 31, 2014, a total of €1,421 million (including accrued interest) was outstanding on the
Tranche B Term Loan due 2018.
FCA US may pre-pay, refinance or re-price the Tranche B Term Loan due 2017 and the Tranche B Term Loan due
2018 without premium or penalty.
In addition, FCA US had a secured revolving credit facility amounting to U.S.$1.3 billion (€1.1 billion) which matures
in May 2016 and remains undrawn at December 31, 2014. The secured revolving credit facility was also re-priced
in June 2013 and as a result, all amounts outstanding under the secured revolving credit facility bear interest, at the
option of FCA US, either at a base rate plus 2.25 percent per annum or at LIBOR plus 3.25 percent per annum. At
December 31, 2014, the secured revolving credit facility was undrawn.
The Tranche B Term Loan due 2017, Tranche B Term Loan due 2018 and the Revolving Credit Facility, are collectively
referred to as the Senior Credit Facilities. Subject to the limitations in the credit agreements governing the Senior
Credit Facilities, or the Senior Credit Agreements and the indenture governing the Secured Senior Notes, FCA US
has the option to increase the amount of the Revolving Credit Facility in an aggregate principal amount not to exceed
U.S.$700 million (approximately €577 million) subject to certain conditions.