Chrysler 2015 Annual Report Download - page 79

2015 | ANNUAL REPORT 79
Senior Credit Facilities - FCA US
The tranche B term loan due 2017 of FCA US consists of the original U.S.$3.0 billion tranche B term loan (€2.8 billion)
that matures on May24, 2017 (the “Original Tranche B Term Loan”) and an additional U.S.$250million (€230 million
at December 31, 2015) 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.” At December31, 2015, €2,863 million
(€2,587 million at December31, 2014), which included accrued interest, was outstanding under the Tranche B Term
Loan due 2017. The outstanding principal amount of the Tranche B Term Loan due 2017 is payable in equal quarterly
installments of U.S.$8.1 million (€7.4 million) from March 2014, with the remaining balance due at maturity in May 2017.
The Tranche B Term Loan due 2017 bears 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 years ended December 31, 2015 and 2014, interest was accrued based on LIBOR.
On February7, 2014, FCA US entered into a new U.S.$1,750 million (€1,607 million) tranche B term loan issued
under a new term loan credit facility that matures on December31, 2018 (the “Tranche B Term Loan due 2018”). At
December31, 2015, €1,574 million (€1,421 million at December31, 2014), which included accrued interest, was
outstanding under the Tranche B Term Loan due 2018. The outstanding principal amount of the Tranche B Term Loan
due 2018 is payable in quarterly installments of U.S.$4.4 million (€4.0 million) from 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. For the years ended December 31, 2015 and 2014, interest
was accrued based on LIBOR.
FCA US may pre-pay, refinance or re-price the Tranche B Term Loan due 2017 and the Tranche B Term Loan due
2018, collectively referred to as the “Senior Credit Facilities”, without premium or penalty.
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 percent
of the equity interests in FCA US’s U.S. subsidiaries and 65 percent of the equity interests in certain of its non-U.S.
subsidiaries held directly by FCA US and its U.S. subsidiary guarantors.
The credit agreements that govern the Senior Credit Facilities (the “Senior Credit Agreements”) include a number of
affirmative covenants, many of which are customary, including, but not limited to, the reporting of financial results and
other developments, compliance with laws, payment of taxes, maintenance of insurance and similar requirements. The
Senior Credit Agreements also 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 restricted
payments including a limit on declaring dividends or distributions to FCA; (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 (€2.8 billion). Furthermore, 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 note for certain material judgments. While the Senior Credit
Facilities are outstanding, distributions to FCA will be limited to 50 percent of FCA US’s consolidated net income (as
defined in the agreements) from January 2012 less distributions paid to date.
As of December31, 2015, FCA US was in compliance with the covenants of the Senior Credit Agreements.