Thrifty Car Rental 2010 Annual Report Download - page 48

public action with respect to FGIC. The NYID may at any time seek an order of rehabilitation or
liquidation of FGIC, which could result, immediately or after a period of time, in an event of
bankruptcy with respect to FGIC under the terms of the Series 2007-1 notes, depending on the
circumstances.
AMBAC and its parent company have been subject to or undertaken several restructuring actions,
including the filing of a Chapter 11 bankruptcy by the parent company on November 8, 2010. In
March 2010, AMBAC was required to establish a segregated account of policies by the OCIW,
although it has been continuing operations and paying claims in the ordinary course on policy
obligations that were not included in that account. Our Series 2006-1 notes were not included in the
segregated account, although there is no assurance that the OCIW will not take further action with
respect to the instruments not included in the segregated account. Any such action could result in a
rapid amortization under the notes. Although the Series 2006-1 notes are insured by AMBAC and
could potentially be subject to a rapid amortization event in the event of an insurer-related default,
those notes began scheduled amortization in December of 2010, and as of February 28, 2011 $300
million in principal amount of these notes has been repaid, with the remaining amount due in three
equal installments through May 2011. Accordingly, the period during which the consequence of any
future rapid amortization event would occur would generally overlap with the scheduled amortization
period, for which we have completed replacement financing as previously discussed elsewhere in
this report. See Part I, Item 1A - Risk Factors, “Event of Bankruptcy with Respect to One or More
Monolines.”
In April 2010, RCFC issued a $200 million Series 2010-1 VFN which may be repaid and redrawn in
whole or in part at any time during the Series 2010-1 VFN’s two-year revolving period. Upon
issuance and at December 31, 2010, the Series 2010-1 VFN was fully drawn at $200 million. At the
end of the revolving period, the then-outstanding principal amount of the Series 2010-1 VFN will be
repaid monthly over a six-month period, beginning in April 2012, with the final payment in September
2012. The Series 2010-1 VFN bears interest at a spread of 275 basis points above the weighted-
average commercial paper rate offered by the commercial paper conduit purchaser or purchasers
from time to time funding advances under the Series 2010-1 VFN, or at 475 basis points over the
affiliated bank’s base rate or a Eurodollar rate in the event that the conduit purchaser is not at such
time funding amounts outstanding under the Series 2010-1 VFN. The Series 2010-1 VFN Program
had an interest rate of 3.06% at December 31, 2010. The Series 2010-1 VFN has a facility fee
commitment rate of up to 1.5% per annum on any unused portion of the facility. In connection with
this financing, RCFC entered into an interest rate cap agreement for a term of 30 months with a
notional amount of $200 million to effectively limit the Series 2010-1 VFN’s floating rate to a
maximum of 5%.
In June 2010, RCFC completed a $300 million Series 2010-2 VFN which may be drawn and repaid
from time to time in whole or in part at any time during the Series 2010-2 VFN’s three-year revolving
period. The Series 2010-2 VFN was undrawn at December 31, 2010. At the end of the revolving
period, the then-outstanding principal amount of the Series 2010-2 VFN will be repaid monthly over a
six-month period, beginning in July 2013, with the final payment in December 2013. The Series
2010-2 VFN bears interest at a spread of 375 basis points above one-month LIBOR. The Series
2010-2 VFN has a facility fee commitment rate of up to 1.5% per annum on any unused portion of
the facility. In connection with this financing, RCFC entered into an interest rate cap agreement for a
term of 42 months with a notional amount of $300 million to effectively limit the Series 2010-2 VFN’s
floating rate to a maximum of 5%.
In October 2010, RCFC completed a $450 million Series 2010-3 VFN, which may be drawn and
repaid from time to time in whole or in part at any time during the Series 2010-3 VFN’s one-year
revolving period. The Series 2010-3 VFN was undrawn at December 31, 2010. At the end of the
revolving period, the then-outstanding principal amount of the Series 2010-3 VFN will be repaid
monthly over a six-month period, beginning in November 2011, with the final payment in April 2012.
The Series 2010-3 VFN bears interest at a spread of 125 basis points above the weighted-average
commercial paper rate offered by the commercial paper conduit purchaser or purchasers from time
to time funding advances under the Series 2010-3 VFN, or at 325 basis points over the affiliated
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