Chrysler 2014 Annual Report Download - page 93

2014 | ANNUAL REPORT 91
The Senior Credit Facilities are secured by a senior priority security interest 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 its non-U.S. subsidiaries held
directly by FCA US and its U.S. subsidiary guarantors.
The Senior Credit Agreements include negative covenants, including but not limited to: (i) limitations on incurrence,
repayment and prepayment of indebtedness; (ii) limitations on incurrence of liens; (iii) limitations on making certain
payments; (iv) limitations on transactions with affiliates, swap agreements and sale and leaseback transactions;
(v) limitations on fundamental changes, including certain asset sales and (vi) restrictions on certain subsidiary
distributions. In addition, the Senior Credit Agreements require FCA US to maintain a minimum ratio of “borrowing
base” to “covered debt” (as defined in the Senior Credit Agreements), as well as a minimum liquidity of U.S.$3.0 billion
(€2.5 billion), which includes any undrawn amounts on the Revolving Credit Facility.
The Senior Credit Agreements contain a number of events of default related to: (i) failure to make payments when due;
(ii) failure to comply with covenants; (iii) breaches of representations and warranties; (iv) certain changes of control;
(v) cross–default with certain other debt and hedging agreements and (vi) the failure to pay or post bond for certain
material judgments. As of December 31, 2014 FCA US was in compliance with all covenants under the Senior Credit
Agreements.
Syndicated Credit Facility of the Group Excluding FCA US
FCA, excluding FCA US, has a syndicated credit facility in the amount of €2.1 billion, or the Syndicated Credit Facility,
which was undrawn at December 31, 2014 and December 31, 2013. The covenants of this facility include financial
covenants (Net Debt/Earnings Before Interest, Taxes, Depreciation and Amortization, or EBITDA, and EBITDA/Net
Interest ratios related to industrial activities) and negative pledge, pari passu, cross default and change of control
clauses. The failure to comply with these covenants, in certain cases if not suitably remedied, can lead to the
requirement to make early repayment of the outstanding loans.
The syndicated credit facility currently includes limits to FCA’s ability to extend guarantees or loans to FCA US.
European Investment Bank Borrowings
We have financing agreements with the European Investment Bank, or EIB, for a total of €1.1 billion primarily to
support investments and research and development projects. In particular, financing agreements include (i) two
facilities of €400 million (maturing in 2018) and €250 million (maturing in 2015) for the purposes of supporting
research and development programs in Italy to protect the environment by reducing emissions and improving energy
efficiency and (ii) €500 million facility (maturing in 2021) for an investment program relating to the modernization and
expansion of production capacity of an automotive plant in Serbia.
As of December 31, 2014 and December 31, 2013 these facilities had been fully drawn.
The covenants applicable to the EIB borrowings are similar to those applicable to the Syndicated Credit Facility
explained above.