Chrysler 2015 Annual Report Download - page 78

78 2015 | ANNUAL REPORT
Operating Results
On December 21, 2015, FCA US prepaid its 2021 Notes with an aggregate principal outstanding amount of
U.S.$3,080 million (€2,833 million) at a price equal to the principal amount of the notes redeemed, plus accrued and
unpaid interest to the date of redemption and a “make-whole” premium calculated in accordance with the terms of the
indenture. The redemption payment of U.S.$3.3 billion (€3.0 billion) was made with cash on hand at FCA US.
Notes Issued by FCA
In April 2015, FCA issued U.S.$1.5 billion (€1.4 billion) principal amount of 4.5 percent unsecured senior debt
securities due April 15, 2020 (the “Initial 2020 Notes”) and U.S.$1.5 billion (€1.4 billion) principal amount of 5.25
percent unsecured senior debt securities due April 15, 2023 (the “Initial 2023 Notes”) at an issue price of 100 percent
of their principal amount. The Initial 2020 Notes and the Initial 2023 Notes, collectively referred to as “the Initial Notes”,
rank pari passu in right of payment with respect to all of FCA’s existing and future senior unsecured indebtedness and
senior in right of payment to any of FCA’s future subordinated indebtedness and existing indebtedness, which is by its
terms subordinated in right of payment to the Initial Notes.
On June 17, 2015, subject to the terms and conditions set forth in our prospectus, we commenced an offer to
exchange up to U.S.$1.5 billion (€1.4 billion) aggregate principal amount of new 4.5 percent unsecured senior debt
securities due 2020 (“2020 Notes”), for any and all of our outstanding Initial 2020 Notes issued on April 14, 2015, and
up to U.S.$1.5 billion (€1.4 billion) aggregate principal amount of new 5.25 percent unsecured senior debt securities
due 2023 (“2023 Notes”), for any and all of our outstanding Initial 2023 Notes issued on April 14, 2015. The 2020
Notes and the 2023 Notes, collectively referred to as “the Notes”, were identical in all material respects to the Initial
Notes, except that the Notes did not contain restrictions on transfer. The exchange offer expired on July 23, 2015.
Substantially all of the Initial Notes were tendered for the Notes.
The Notes impose covenants on FCA including: (i)negative pledge clauses which require that, in case any security
interest upon assets of FCA is granted in connection with other notes or debt securities having the same ranking,
such security should be equally and ratably extended to the outstanding Notes; (ii)pari passu clauses, under which
the Notes rank and will rank pari passu with all other present and future unsubordinated and unsecured obligations
of FCA; (iii)periodic disclosure obligations; (iv)cross-default clauses which require immediate repayment of the Notes
under certain events of default on other financial instruments issued by FCA’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. At December 31, 2015, FCA was in compliance with the covenants of the Notes.
Bank Debt
Bank debt was primarily comprised of amounts due under (i) the senior credit facilities of FCA US of €4.4 billion at
December31, 2015 and €4.0 billion at December31, 2014, (ii) financial liabilities of the Brazilian operating entity (€4.1
billion at December31, 2015 and €4.7 billion at December31, 2014) relating to a number of financing arrangements
with certain Brazilian development banks, primarily used to support capital expenditures, including those in our
Pernambuco plant (approximately €1.2 billion at December31, 2015 and at December 31, 2014), as well as to fund
the financial services business in that country, (iii) loans provided by the EIB (€1.2 billion at December31, 2015 and
€1.0 billion at December31, 2014) to fund our investments and research and development costs, (iv) amounts drawn
down by FCA treasury companies (excluding FCA US) under short and medium term credit facilities (€0.6 billion
at December31, 2015 and €1.4 billion at December31, 2014) and (v) amounts outstanding relating to financing
arrangements of FCA Mexico amounting to €0.5 billion at December31, 2015 (€0.4 billion was outstanding relating to
financing arrangements of FCA Mexico with certain Mexico development banks at December31, 2014).