Chrysler 2015 Annual Report Download - page 214

214 2015 | ANNUAL REPORT
Consolidated
Financial Statements
Notes to the Consolidated
Financial Statements
Revolving Credit Facilities
In June 2015, FCA entered into a new €5.0 billion syndicated revolving credit facility (“RCF”). The RCF, which is for
general corporate purposes and working capital needs of the Group, replaced and expanded the €2.1 billion three-
year revolving credit facility entered into by FCA on June 21, 2013 and replaced the U.S.$1.3 billion five-year revolving
credit facility of FCA US (“FCA US RCF”) that was scheduled to expire on May 24, 2016. On November 25, 2015, FCA
US terminated its undrawn FCA US RCF.
The RCF is available in two tranches. As of December31, 2015, the first tranche of €2.5 billion was available and was
undrawn. The first tranche matures in July 2018 and has two extension options (1-year and 11-months, respectively)
which are exercisable on the first and second anniversary of signing. The second tranche, which consists of an
additional €2.5 billion, matures in June 2020 and will be available upon the elimination of the restrictions under certain
of FCA US’s financing documentation on the provision of guarantees and payment of dividends by FCA US for the
benefit of the rest of the Group (as described above in respect of the Senior Credit Facilities).
The covenants of the RCF include financial covenants (Net Debt/Adjusted Earnings Before Interest, Depreciation and
Amortization (“Adjusted EBITDA”) and Adjusted 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 and, in
certain cases if not suitably remedied, can lead to the requirement of early repayment of any outstanding amounts. At
December 31, 2015, FCA was in compliance with the covenants of the RCF.
At December 31, 2015, undrawn committed credit lines totaling €3.4 billion included the first tranche of €2.5 billion
of the new €5.0 billion RCF and approximately €0.9 billion of other revolving credit facilities. At December 31, 2014,
undrawn committed credit lines included the €2.1 billion syndicated revolving credit facility entered into by FCA in
2013 and the U.S.$1.3 billion FCA US RCF.
European Investment Bank Borrowings
We have financing agreements with the EIB for a total of €1.2 billion outstanding at December 31, 2015 (€1.1 billion
outstanding at December 31, 2014), which included the (i) new €600 million facility described below, (ii)a facility of
€400million (maturing in 2018) for supporting certain investments and research and development programs in Italy
to protect the environment through the reduction of emissions and improved energy efficiency and (iii)a €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.
On June 29, 2015, FCA, EIB and SACE finalized a €600 million loan earmarked to support the Group’s automotive
research, development and production plans for 2015 to 2017 which includes studies for efficient vehicle technologies
for vehicle safety and new vehicle architectures. The three-year loan due July 2018 provided by EIB, which is also 50
percent guaranteed by SACE, relates to FCA’s production and research and development sites in both northern and
southern Italy. The loan was drawn in full at December31, 2015.
Brazil
Our Brazilian subsidiaries have access to various local bank facilities in order to fund investments and operations.
Total debt outstanding under those facilities amounted to €4.1 billion at December 31, 2015 (€4.7 billion at December
31, 2014), of which €3.6 billion are medium term loans (€4.3 billion at December 31, 2014), with an average residual
maturity between 2 to 3 years, while €0.5 billion (€0.4 billion at December 31, 2014) are short-term credit facilities.
Medium-term facilities primarily include subsidized loans granted by such public financing institutions as Banco
Nacional do Desenvolvimento (“BNDES”), with the aim to support industrial projects in certain areas. This provided
the Group the opportunity to fund large investments in Brazil, with loans of sizeable amounts at low rates and with
maturities greater than 10 years. At December 31, 2015, outstanding subsidized loans amounted to €1.9 billion (€2.3
billion at December 31, 2014), of which €1.2 billion (€1.2 billion at December 31, 2014), related to the construction of
the plant in Pernambuco (Brazil), which has been supported by subsidized credit lines totaling Brazilian Real (“BRL”)
6.5 billion (€1.5 billion). Approximately €0.3 billion of committed credit lines contracted to fund scheduled investments
in the area were undrawn at December31, 2015 (€0.9 billion at December 31, 2014). The average residual maturity of
the subsidized loans was approximately 4 years.