DELPHI 2013 Annual Report Download - page 72

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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 additional 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.
Senior Notes
On May 17, 2011, Delphi Corporation issued $500 million of 5.875% senior unsecured notes due 2019 and $500 million
of 6.125% senior notes due 2021 (the “2011 Senior Notes”) in a transaction exempt from registration under Rule 144A and
Regulation S of the Securities Act of 1933 (the “Securities Act”). Delphi paid approximately $23 million of debt issuance costs
in connection with the 2011 Senior Notes. The net proceeds of approximately $1 billion as well as cash on hand were used to
pay down amounts outstanding under the Original Credit Agreement. In May 2012, Delphi Corporation exchanged all of the
2011 Senior Notes for registered notes (“New Senior Notes”) with terms identical in all material respects to the terms of the
2011 Senior Notes, except that the New Senior Notes are registered under the Securities Act, and the transfer restrictions and
registration rights relating to the 2011 Senior Notes no longer apply. No proceeds were received by Delphi Corporation as a
result of the exchange. Interest is payable semi-annually on May 15 and November 15 of each year to holders of record at the
close of business on May 1 or November 1 immediately preceding the interest payment date.
The indenture governing the New Senior Notes limits, among other things, Delphi’s (and Delphi’s subsidiaries’) ability to
incur additional indebtedness or liens, dispose of assets, make certain restricted payments or investments, enter into
transactions with affiliates or merge with or into other entities. As of December 31, 2013, the Company was in compliance with
the provisions of the New Senior Notes.
On February 14, 2013, Delphi Corporation issued $800 million of 5.00% senior unsecured notes due 2023 (the “2013
Senior Notes”) in a transaction registered under the Securities Act. The proceeds were primarily utilized to prepay our term
loan indebtedness under our 2012 Credit Agreement. Delphi paid approximately $12 million of issuance costs in connection
with the 2013 Senior Notes. Interest is payable semi-annually on February 15 and August 15 of each year to holders of record
at the close of business on February 1 or August 1 immediately preceding the interest payment date.