Delta Airlines 2010 Annual Report Download - page 72

Table of Contents
Senior Secured Exit Financing Facilities due 2012 and 2014
In connection with Delta's emergence from bankruptcy in April 2007, we entered into a senior secured exit financing facility (the "Senior Secured Exit
Financing Facilities") to borrow up to $2.5 billion. The Senior Secured Exit Financing Facilities originally consisted of a:
• $1.0 billion first-lien revolving credit facility (the "Exit Revolving Facility");
• $600 million first-lien synthetic revolving facility (the "Synthetic Facility") (together with the Exit Revolving Facility, the "First- Lien Facilities");
and
• $900 million second-lien term loan facility (the "Second-Lien Facility").
During 2010, we (1) repaid $914 million of our Exit Revolving Facility and (2) amended the Exit Revolving Facility to convert the remaining $86 million
of revolving commitment to a fully funded, non-revolving loan due April 2012. Borrowings under the Senior Secured Exit Financing Facilities can be repaid
without penalty and amounts repaid under the Exit Revolving Facility and Synthetic Facility can be reborrowed. As of December 31, 2010, the Exit
Revolving Facility was undrawn.
Borrowings under the Synthetic Facility and Second-Lien Facility must be repaid annually in an amount equal to 1% of the original principal amount of the
respective loans (to be paid annually with respect to the Synthetic Facility and in equal quarterly installments with respect to the Second-Lien Facility). All
remaining borrowings under the First-Lien Facilities and the Second-Lien Facility are due in April 2012 and April 2014, respectively. As of December 31,
2010, the Senior Secured Exit Financing Facilities had interest rates ranging from 2.3% to 3.5% per annum.
Our obligations under the Senior Secured Exit Financing Facilities are guaranteed by substantially all of our domestic subsidiaries (the "Guarantors"). The
Senior Secured Exit Financing Facilities and the related guarantees are secured by liens on substantially all of our and the Guarantors' present and future
assets that do not secure other financings (the "Collateral"). The First-Lien Facilities are secured by a first priority security interest in the Collateral. The
Second-Lien Facility is secured by a second priority security interest in the Collateral.
The Senior Secured Exit Financing Facilities include affirmative, negative and financial covenants that restrict our ability to, among other things, incur
additional secured indebtedness, make investments, sell or otherwise dispose of assets if not in compliance with the collateral coverage ratio tests, pay
dividends or repurchase stock. These covenants may have a material adverse impact on our operations and 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 Senior Secured Exit Financing Facilities), which minimum ratio is 1.20:1 under the First-Lien Facilities and 1.02:1 under the
Second-Lien Facility;
• maintain unrestricted cash, cash equivalents and permitted investments of not less than $750 million under the First-Lien Facilities and $650 million
under the Second-Lien Facility;
• maintain a minimum total collateral coverage ratio (defined as the ratio of (1) certain of the 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 1.25:1 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 1.75:1 at all times.
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