Thrifty Car Rental 2010 Annual Report Download - page 49

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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 2010-3 VFN. The Series 2010-3 VFN has a facility
fee commitment rate of up to 0.8% 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 25 months with a
notional amount of $450 million to effectively limit the Series 2010-3 VFN’s floating rate to a
maximum of 5%.
Canadian Fleet Financing
DTG Canada had a partnership agreement (the “Partnership Agreement”) with an unrelated bank’s
conduit. This transaction included the creation of a limited partnership to facilitate financing of
Canadian vehicles. The term of the Partnership Agreement expired on May 31, 2010.
In May 2010, the Company completed a new CAD $150 million Canadian fleet securitization
program (“CAD Series 2010 Program”). This CAD Series 2010 Program has a term of one year and
requires a program fee of 225 basis points above the weighted-average commercial paper rate
offered by the purchaser or purchasers and a utilization fee of 100 basis points on the unused
program amount. In connection with the CAD Series 2010 Program, the Company repaid the
remaining outstanding principal balance under the limited partner interest in limited partnership. At
December 31, 2010, DTG Canada had approximately CAD $49.0 million (US $49.1 million) funded
under this program. The CAD Series 2010 Program had an interest rate of 3.43% at December 31,
2010.
Senior Secured Credit Facilities
At December 31, 2010, the Company’s senior secured credit facilities (the “Senior Secured Credit
Facilities”) were comprised of a $231.3 million Revolving Credit Facility and a $148.1 million term
loan (the “Term Loan”), both of which expire on June 15, 2013. The Senior Secured Credit Facilities
contain certain financial and other covenants and are 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 Term Loan bears interest at LIBOR plus 2.5% which was
2.76% and 2.73% at December 31, 2010 and 2009, respectively. As of December 31, 2010, the
Company is in compliance with all covenants.
On February 9, 2011, the Company and the requisite percentage of the lenders under the
Company’s Senior Secured Credit Facilities, entered into an amendment (the “Amendment”), which
reinstated the Company’s ability to borrow under the Revolving Credit Facility at its capacity of
$231.3 million. Additionally, the Company is no longer required to maintain a minimum adjusted
tangible net worth of $150 million and a minimum of $100 million of unrestricted cash and cash
equivalents. The Amendment replaced the foregoing covenants with a maximum leverage ratio of
2.25 to 1.00 and a minimum interest coverage ratio of 2.00 to 1.00.
In addition, the Amendment removed certain limitations relating to the issuance of enhancement
letters of credit supporting asset-backed notes issued by RCFC. The Amendment eliminated events
of default resulting from amortization events under certain series of RCFC’s outstanding asset-
backed notes to the extent resulting from bankruptcy events with respect to the related Monolines.
The Amendment also removed restrictions on allocation of capital spending to allow for certain
franchise acquisitions and to permit dividends and share repurchases.
The Company paid a one-time amendment fee of 25 basis points to participating lenders, based on
outstanding commitments and loans.
The Revolving Credit Facility has a capacity of $231.3 million and expires on June 15, 2013. The
Company had letters of credit outstanding under the Revolving Credit Facility of $39.8 million for
U.S. enhancement, $14.2 million for Canadian enhancement and $63.0 million in general purpose
enhancements, with remaining available capacity of $114.3 million at December 31, 2010.
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