US Airways 2005 Annual Report Download - page 131

Table of Contents
US Airways Group, Inc.
Notes to Consolidated Financial Statements — (Continued)
bear interest at a rate per annum equal to LIBOR plus 840 basis points increasing by 5 basis points on January 18 of each year, beginning January 18,
2006 through the end of the loan term, payable on a quarterly basis. All other terms associated with this loan remain unchanged. As a result of the sale
of the loan, the AWA ATSB Loan is now referred to as the AWA Citibank Loan, and had an outstanding balance of $250 million at December 31,
2005.
The AWA Citibank Loan is now secured debt. It requires certain prepayments from the proceeds of specified asset sales by US Airways Group and the
other loan parties, and US Airways Group is required to maintain consolidated unrestricted cash and cash equivalents, less: (a) the amount of all
outstanding advances by credit card processors and clearing houses in excess of 20% of the air traffic liabilities; (b) $250 million presumed necessary to
fund a subsequent tax trust (to the extent not otherwise funded by US Airways Group); (c) $35 million presumed necessary to post collateral to clearing
houses (to the extent not posted); and (d) any unrestricted cash or cash equivalents held in unperfected accounts; in an amount (subject to partial
reduction under certain circumstances upon mandatory prepayments made with the net proceeds of future borrowings and issuances of capital stock) not
less than:
• $525 million from September 27, 2005 through March 2006;
• $500 million through September 2006;
• $475 million through March 2007;
• $450 million through September 2007;
• $400 million through March 2008;
• $350 million through September 2008; and
• $300 million through September 2010.
(b) On September 10, 2004, AWA entered into a term loan financing with GECC providing for loans in an aggregate amount of $111 million. AWA used
approximately $77 million of the proceeds from this financing to repay in full its term loan with Mizuho Corporate Bank, Ltd. and certain other lenders
and to pay certain costs associated with this transaction. AWA used the remaining proceeds for general corporate purposes. The new term loan
financing consists of two secured term loan facilities: a $76 million term loan facility secured primarily by spare parts, rotables and appliances (the
"Spare Parts Facility"); and a $35 million term loan facility secured primarily by aircraft engines and parts installed in such engines (the "Engine
Facility").
The facilities are cross-collateralized on a subordinated basis, and the collateral securing the facilities also secures on a subordinated basis certain of
AWA's other existing debt and lease obligations to GECC and its affiliates.
The loans under the Spare Parts Facility are payable in full at maturity on September 10, 2010. The loans under the Engine Facility are payable in equal
quarterly installments of approximately $1 million beginning on March 10, 2006 through June 10, 2010, with the remaining loan amount of $12 million
payable at maturity on September 10, 2010. The loans under each facility may be prepaid in an amount not less than $5 million at any time after the
30th monthly anniversary of the funding date under such facility. If AWA fails to maintain a certain ratio of rotables to loans under the Spare Parts
Facility, it may be required to pledge additional rotables or cash as collateral, provide a letter of credit or prepay some or all of the loans under the Spare
Parts Facility. In addition, the loans under the Engine Facility are subject to mandatory prepayment upon the occurrence of certain events of loss
applicable to, or certain dispositions of, aircraft engines securing the facility. Principal amounts outstanding under the loans bear interest at a rate per
annum based on three-month LIBOR plus a 125