US Airways 2004 Annual Report Download - page 37

Table of Contents
10 3/4% Senior Notes due 2005
In August 1995, AWA issued $75.0 million principal amount of 103/4% senior unsecured notes due 2005 of which $39.5 million remained outstanding at
December 31, 2004. Interest on the 103/4% senior unsecured notes is payable semiannually in arrears on March 1 and September 1 of each year. The senior
notes were subsequently redeemed on January 26, 2005.
7.5% Convertible Senior Notes due 2009
In connection with the closing of the government guaranteed loan and the related transactions, Holdings issued $104.5 million of 7.5% convertible senior
notes due 2009, of which approximately $112.3 million remained outstanding at December 31, 2004 (including interest paid through December 31, 2004 as a
deemed loan added to the principal thereof). These notes are convertible into shares of class B common stock, at the option of the holders, at an initial
conversion price of $12.00 per share or a conversion ratio of approximately 83.333 shares per $1,000 principal amount of such notes, subject to standard anti-
dilution adjustments. Interest on the 7.5% convertible senior notes is payable semiannually in arrears on June 1 and December 1 of each year. At Holdings'
option, the first six interest payments were payable in the form of a deemed loan added to the principal amount of these notes. The 7.5% convertible senior
notes will mature on January 18, 2009 unless earlier converted or redeemed. The payment of principal, premium and interest on the 7.5% convertible senior
notes is fully and unconditionally guaranteed by AWA.
Holdings may redeem 7.5% convertible senior notes, in whole or in part, at the following redemption prices (expressed as percentages of the principal
amount thereof), if redeemed during the twelve-month period commencing on January 18 of the years set forth below, plus, in each case, accrued and unpaid
interest, if any, to the date of redemption:
Year Redemption Price
2005 103.75%
2006 102.50%
2007 101.25%
2008 and thereafter 100.00%
7.25% Senior Exchangeable Notes due 2023
In July and August of 2003, AWA completed a private placement of approximately $86.8 million issue price of 7.25% Senior Exchangeable Notes due
2023. The notes bear cash interest until July 30, 2008. Thereafter, the notes will cease bearing cash interest and begin accruing original issue discount daily at
a rate of 7.25% per year until maturity. Each note was issued at a price of $343.61 and is exchangeable for class B common stock of Holdings at an exchange
ratio of 32.038 shares per $1,000 principal amount at maturity of the notes (subject to adjustment in certain circumstances). This represents an equivalent
conversion price of approximately $10.73 per share. The aggregate amount due at maturity, including accrued original issue discount from July 31, 2008, will
be $252,695,000. The notes are unconditionally guaranteed on a senior unsecured basis by Holdings.
Holders may exchange their notes for the shares of class B common stock of Holdings in any fiscal quarter commencing after September 30, 2003, if, as of
the last day of the preceding fiscal quarter, the closing sale price of the class B common stock for at least 20 trading days in a period of 30 consecutive trading
days ending on the last trading day of such preceding fiscal quarter is more than 110% of the accreted exchange price per share of Class B common stock on
the last day of such preceding fiscal quarter. If the foregoing condition is satisfied, then the notes will be exchangeable at any time at the option of the holder
through maturity. The accreted exchange price per share as of any day will equal the issue price of a note plus accrued original issue discount to that day
divided by 32.038, subject to any adjustments to the exchange rate through that day.
On or before July 30, 2018, a holder also may exchange its notes for shares of the Class B common stock at any time after a 10 consecutive trading-day
period in which the average of the trading prices for the notes for that 10 trading-day period was less than 103% of the average exchange value for the notes
during that period. Exchange value is equal to the product of the closing sale price for the shares of Class B common stock on a given day multiplied by the
then current exchange rate, which is the number of shares of Class B common stock for which each note is then exchangeable.
In addition, the holders may exchange the notes if the notes have been called for redemption or if certain specified corporate transactions have occurred.
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