Dollar Rent A Car 2011 Annual Report Download - page 46

Variable Funding Notes
VFNs at December 31, 2011 were comprised of $600 million in U.S. fleet financing capacity that may be drawn and repaid from time to time in whole or in
part during the revolving period, which ends in September 2013.
In October 2011, the Series 2010-1 and Series 2010-2 VFNs were terminated as a result of the renewal and increase of the Series 2010-3 VFN and the issuance
of the Series 2011-2 notes.
The Series 2010-3 VFN of $600 million was undrawn at December 31, 2011. At the end of the revolving period, the then-outstanding principal amount of the
Series 2010-3 VFN will be repaid monthly over a three-month period, beginning in October 2013, with the final expected payment date in December 2013. The
Series 2010-3 VFN requires a maximum leverage ratio of 3.0 to 1.0, a minimum interest coverage ratio of 2.0 to 1.0 and a minimum corporate EBITDA
requirement of $75 million, consistent with the covenants in the New Revolving Credit Facility.
Canadian Fleet Financing
On April 18, 2011, due to the Company’s excess cash position and the cost differential between the interest rate on its Canadian fleet financing and interest
rates earned on investment of excess cash, the Company fully repaid the outstanding balance of CAD $54.0 million (US $56.0 million) and terminated the
CAD Series 2010 Program. Direct investments in the Canadian fleet funded from cash and cash equivalents totaled CAD $64.9 million (US $63.5 million)
as of December 31, 2011.
Senior Secured Credit Facilities
On August 31, 2011, the Company repaid the outstanding balance of $143.1 million under the term loan (the “Term Loan”) and terminated the Term Loan
portion of its senior secured credit facilities (the “Senior Secured Credit Facilities”). Accordingly, at December 31, 2011, the Company’s Senior Secured
Credit Facilities was comprised of only the $231.3 million revolving credit facility (the “Revolving Credit Facility”) which was refinanced and terminated on
February 16, 2012. The Senior Secured Credit Facilities contained certain financial and other covenants and were collateralized by a first priority lien on
substantially all material non-vehicle assets and certain vehicle assets not pledged as collateral under a vehicle financing facility. The Company had letters of
credit outstanding under the Revolving Credit Facility of $144.3 million for U.S. enhancement and $54.7 million in general purpose letters of credit with
remaining available capacity of $32.3 million at December 31, 2011.
On February 16, 2012, the Company terminated its existing Senior Secured Credit Facilities and replaced it with the $450 million New Revolving Credit
Facility that expires in February 2017. Under the New Revolving Credit Facility, the Company is subject to a maximum corporate leverage ratio of 3.0 to 1.0,
a minimum corporate interest coverage ratio of 2.0 to 1.0, and a minimum corporate EBITDA requirement of $75 million. In addition, the New Revolving
Credit Facility contains covenants restricting our ability to undertake certain activities, including, among others, restrictions on the Company’s ability to incur
additional indebtedness, make loans, acquisitions or other investments, grant liens on its property, dispose of assets, pay dividends or conduct stock
repurchases, make capital expenditures or engage in certain transactions with affiliates.
Under the New Revolving Credit Facility, certain restrictions were relaxed or extended from the Senior Secured Credit Facilities, so that we have the ability
(subject to specified conditions and limitations), among other things, to incur up to $400 million of unsecured notes of the Company, to enter into permitted
acquisitions of up to $250 million in the aggregate during the term of the New Revolving Credit Facility and to incur financing and assume indebtedness in
connection therewith, and to make investments in our U.S. special-purpose financing entities (including RCFC) and our Canadian special-purpose financing
entities, in aggregate amounts at any time outstanding of up to $750 million and $150 million, respectively. In addition, we renewed and extended our ability,
subject to certain limitations, to make dividend, stock repurchase and other restricted payments under the New Revolving Credit Facility, in an amount up to
$300 million, plus 50% of cumulative adjusted net income (or minus 100% of cumulative adjusted net loss, as applicable) for the period beginning January 1,
2012 and ending on the last day of the fiscal quarter immediately preceding the restricted payment.
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