Delta Airlines 2007 Annual Report Download - page 96

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Table of Contents
Index to Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The Exit Facilities contain financial covenants that require us to:
• maintain a minimum fixed charge coverage ratio (defined as the ratio of (1) earnings before interest, taxes, depreciation, amortization and aircraft
rent, and subject to other adjustments to net income ("EBITDAR") to (2) the sum of gross cash interest expense, cash aircraft rent expense and
the interest portion of our capitalized lease obligations, for successive trailing 12-month periods ending at each quarter-end date through the
maturity date of the respective Exit Facilities), which minimum ratio will range from 1.00:1 to 1.20:1 in the case of the First-Lien Facilities and
from 0.85:1 to 1.02:1 in the case of the Second-Lien Facility;
• maintain unrestricted cash, cash equivalents and short-term investments of not less than $750 million in the case of the First-Lien Facilities and
$650 million in the case of the Second-Lien Facility, in each case at all times following the 30th day after the Closing Date;
• maintain a minimum total collateral coverage ratio (defined as the ratio of (1) certain of our Collateral that meets specified eligibility standards
("Eligible Collateral") to (2) the sum of the aggregate outstanding exposure under the First-Lien Facilities and the Second-Lien Facility and the
aggregate termination value of certain hedging agreements) of 125% at all times; and
• in the case of the First-Lien Facilities, also maintain a minimum first-lien collateral coverage ratio (together with the total collateral coverage
ratio described above, the "collateral coverage ratios") (defined as the ratio of (1) Eligible Collateral to (2) the sum of the aggregate outstanding
exposure under the First Lien Facilities and the aggregate termination value of certain hedging agreements) of 175% at all times.
The Exit Facilities contain events of default customary for Chapter 11 exit financings, including cross-defaults to other material indebtedness and
certain change of control events. The Exit Facilities also include events of default specific to our business, including if all or substantially all of our flights and
other operations are suspended for more than two consecutive days (other than as a result of a Federal Aviation Administration (the "FAA") suspension due to
extraordinary events similarly affecting other major U.S. air carriers). Upon the occurrence of an event of default, the outstanding obligations under the Exit
Facilities may be accelerated and become due and payable immediately.
2007-1 EETC
In October 2007, we completed the sale of $1.4 billion of the 2007-1 Certificates. The 2007-1 Certificates were issued in three classes, comprised of
$924 million of Class A Certificates with an interest rate of 6.82% per annum, $265 million of Class B Certificates with an interest rate of 8.02% per annum
and $220 million of Class C Certificates with an interest rate of 8.95% per annum. Each class of the 2007-1 Certificates was issued by a different pass through
trust.
The proceeds from the sale of the 2007-1 Certificates were used to acquire equipment notes (the "Equipment Notes") from us in an aggregate principal
amount of $1.4 billion. The Equipment Notes are secured by 36 Boeing aircraft delivered to us from 1998 to 2002. The aircraft previously secured certain
other financings described below. The Equipment Notes were issued in three series, bearing interest and in principal amounts corresponding to the respective
class of 2007-1 Certificates.
Interest on the Equipment Notes is payable semiannually on each February 10 and August 10, beginning on February 10, 2008. The principal payments
on the Equipment Notes are scheduled on February 10 and August 10 in certain years, beginning on February 10, 2008. The final payments will be due on
August 10, 2022, in the case of the Series A and Series B Equipment Notes, and August 10, 2014, in the case of the Series C Equipment Notes. The
Equipment Notes issued with respect to each aircraft are secured by a lien on such aircraft and also are cross-collateralized by the other aircraft. Payments on
the Equipment Notes held in each pass-through trust will be passed through to the certificate holders of such trust.
F-36