DELPHI 2015 Annual Report Download - page 77

Table of Contents
55
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, 2015, the Issuer selected the one-month LIBOR interest rate option on
the Tranche A Term Loan and the ABR interest rate option on the Revolving Credit Facility, as detailed in the table below, and
the amounts outstanding, and rates effective as of December 31, 2015 were based on Delphi’s current credit rating and the
Applicable Rate for the Credit Agreement:
Borrowings as of
December 31, 2015 Rates effective as of
Applicable Rate (in millions) December 31, 2015
Revolving Credit Facility ................................................................ ABR plus 0.00% $ — —%
Tranche A Term Loan...................................................................... LIBOR plus 1.00% 400 1.3125%
The Issuer was obligated to make quarterly principal payments throughout the term of the Tranche A Term Loan
according to the amortization schedule in the Credit Agreement. In conjunction with the partial repayment of the Tranche A
Term Loan during the year ended December 31, 2014, all principal payment obligations have been satisfied through March 1,
2018. 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
certain asset sales or casualty events. No mandatory prepayments under these provisions have been made or are due through
December 31, 2015.
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, 2015. In the first quarter of 2014, the Company satisfied
credit rating-related conditions to the suspension of many of the restrictive covenants and the mandatory prepayment provisions
relating to asset sales and casualty events discussed above. Such covenants and prepayment obligations are required to be
reinstated if the applicable credit rating criteria are no longer satisfied.
As of December 31, 2015, all obligations under the Credit Agreement are borrowed by Delphi Corporation and jointly
and severally guaranteed by its direct and indirect parent companies, subject to certain exceptions set forth in the Credit
Agreement.
Prior to the first quarter of 2014, certain of Delphi Automotive PLC’s direct and indirect subsidiaries, which are directly
or indirectly 100% owned by Delphi Automotive PLC, fully and unconditionally guaranteed all obligations under the Credit
Agreement. In addition, 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. All
guarantees of Delphi Corporation's subsidiaries and all then-existing security interests were released during the first quarter of
2014 when the Company satisfied certain credit rating-related and other conditions under the terms of the Credit Agreement.
Such security interests and subsidiary guarantees may be reinstated at the election of the lenders if the applicable credit rating
criteria are no longer satisfied.
Senior Unsecured Notes
On May 17, 2011, Delphi Corporation issued $500 million of 5.875% senior unsecured notes due 2019 (the "5.875%
Senior Notes") and $500 million of 6.125% senior unsecured notes due 2021 (the “6.125% Senior Notes”) (collectively, 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 completed a registered exchange offer for all of the 2011 Senior
Notes. No proceeds were received by Delphi Corporation as a result of the exchange. In March 2014, Delphi redeemed for cash
the entire $500 million aggregate principal amount outstanding of the 5.875% Senior Notes, financed by a portion of the