DELPHI 2013 Annual Report Download - page 104

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Loans under the Credit Agreement bear interest, at Delphi Corporation's option, at either (a) the Administrative Agent’s
Alternate Base Rate (“ABR” as defined in the Credit Agreement) or (b) the London Interbank Offered Rate (the “Adjusted
LIBO Rate” as defined in the Credit Agreement) (“LIBOR”) plus in either case a percentage per annum as set forth in the table
below (the “Applicable Rate”). The Tranche B Term Loan had a LIBOR floor of 1.00%. The Applicable Rates under the 2012
Credit Agreement and current Credit Agreement are set forth below:
Credit Agreement (December 31, 2013) 2012 Credit Agreement (December 31, 2012)
LIBOR plus ABR plus LIBOR plus ABR plus
Revolving Credit Facility ....................... 1.25% 0.25% 2.00% 1.00%
Tranche A Term Loan............................. 1.25% 0.25% 2.00% 1.00%
Tranche B Term Loan............................. N/A N/A 2.50% 1.50%
The Applicable Rate under the Credit Agreement may increase or decrease from time to time based on changes in credit
ratings with the minimum interest level of 0.00% and a maximum level of 2.25%. Accordingly, the interest rate will fluctuate
during the term of the Credit Agreement based on changes in the ABR, LIBOR or future changes in our corporate credit ratings.
The Credit Agreement also requires that the Issuer pay certain commitment fees on the unused portion of the Revolving Credit
Facility and certain letter of credit issuance and fronting fees.
The interest rate period with respect to LIBOR interest rate options can be set at one-, two-, three-, or six-months as
selected by the Issuer in accordance with the terms of the Credit Agreement (or other period as may be agreed by the applicable
lenders), but payable no less than quarterly. The Issuer may elect to change the selected interest rate in accordance with the
provisions of the Credit Agreement. As of December 31, 2013, Delphi Corporation selected the one-month LIBOR interest rate
option, as detailed in the table below, and the amounts outstanding, and rates effective as of December 31, 2013 were based on
Delphi’s current credit rating and applicable margin for the Credit Agreement:
Borrowings as of
December 31, 2013 Rates effective as of
LIBOR plus (in millions) December 31, 2013
Revolving Credit Facility.................................................. 1.25% $ — —%
Tranche A Term Loan
........................................................ 1.25% 564 1.4375%
The Issuer is obligated to make quarterly principal payments throughout the terms of the Tranche A Loan according to the
amortization schedule in the Credit Agreement. Borrowings under the Credit Agreement are prepayable at the Issuer's option
without premium or penalty. The Credit Agreement also contains certain mandatory prepayment provisions in the event the
Company receives net cash proceeds from any asset sale or casualty event. No mandatory prepayments, under these provisions,
have been made or are due through December 31, 2013.
The Credit Agreement contains certain covenants that limit, among other things, the Company’s (and the Company’s
subsidiaries’) ability to incur additional indebtedness or liens, to dispose of assets, to make certain investments, to prepay
certain indebtedness and to pay dividends, or to make other distributions or redemptions/repurchases, in respect of the
Company’s equity interests. In addition, the Credit Agreement requires that the Company maintain a consolidated leverage ratio
(the ratio of Consolidated Total Indebtedness to Consolidated EBITDA, each as defined in the Credit Agreement) of less than
2.75 to 1.0. The Credit Agreement also contains events of default customary for financings of this type. The Company was in
compliance with the Credit Agreement covenants as of December 31, 2013. In December 2013, Delphi Automotive PLC
received an investment grade credit rating from Standard & Poor's Rating Services and met the other conditions in the Credit
Agreement for the release of all security interests on the collateral that was previously pledged in accordance with the Credit
Agreement. As a result, all such collateral was released in the first quarter of 2014. The Credit Agreement requires that such
security interests be reinstated if neither Delphi Automotive PLC nor Delphi Corporation have investment grade ratings from
Standard & Poor's Rating Service or Moody's Investor Service. In addition, certain covenants shall not apply and certain
guarantees shall be released after Delphi Automotive PLC and Delphi Corporation have received additional investment grade
credit ratings as specified in the Credit Agreement and no default has occurred or is continuing, provided that such covenants
may be reinstated if the investment grade condition ceases to be satisfied.
All obligations under the Credit Agreement are borrowed by Delphi Corporation and jointly and severally guaranteed by
its direct and indirect parent companies and by certain of Delphi Automotive PLC’s existing and future direct and indirect
subsidiaries that are directly or indirectly 100% owned by the Company, subject to certain exceptions set forth in the Credit
Agreement. All obligations under the Credit Agreement, including the guarantees of those obligations, were originally secured
by certain assets of Delphi Corporation and the guarantors, including substantially all of the assets of Delphi Automotive PLC,
and its U.S. subsidiaries, and certain assets of Delphi Corporation’s direct and indirect parent companies.