Chrysler 2015 Annual Report Download - page 80

80 2015 | ANNUAL REPORT
Operating Results
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 the 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 fully drawn 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, which has been supported by subsidized credit lines totaling Brazilian Real (“BRL”) 6.5 billion
(€1.5 billion). Approximately €0.3 billion (€0.9 billion at December 31, 2014), of committed credit lines contracted to
fund scheduled investments in the area were undrawn at December31, 2015. The average residual maturity of the
subsidized loans was approximately 4 years.
Mexico Bank Loan
On March20, 2015, FCA Mexico, S.A. de C.V., (“FCA Mexico”), our principal operating subsidiary in Mexico, entered
into a U.S.$900 million (€0.8 billion) non-revolving loan agreement (“Mexico Bank Loan”) maturing on March 20, 2022
and received an initial disbursement of U.S.$500 million (€0.5 billion at December31, 2015), which bears interest at
one-month LIBOR plus 3.35 percent per annum. The proceeds were used to prepay all amounts outstanding under
the Mexican development bank credit facilities amounting to approximately €414 million. Effective July 20, 2015,
we extended the disbursement term of the Mexico Bank Loan through September 20, 2016, during which time the
remaining U.S.$400 million (€0.4 billion at December 31, 2015) is available for disbursement, subject to meeting certain
preconditions for additional disbursements and a commitment fee of 0.50 percent per annum on the undisbursed
balance. At December 31, 2015, the U.S.$400 million (€0.4 billion) was undisbursed. The loan agreement requires FCA
Mexico to maintain certain fixed and other assets as collateral, and comply with certain covenants, including, but not
limited to, financial maintenance covenants, limitations on liens, incurrence of debt and asset sales. The Group may not
prepay all or any portion of the loan prior to the 18-month anniversary of the effective date of the loan agreement. At
December 31, 2015, the Group was in compliance with all covenants under the Mexico Bank Loan.