US Airways 2005 Annual Report Download - page 81

Table of Contents
Under the Amended and Restated US Airways Loan Agreement, the US Airways loan now bears interest as follows:
• 90% of the US Airways loan (Tranche A), which was the portion of the loan previously guaranteed by the ATSB, was originally funded through a
participating lender's commercial paper conduit program and bears interest at a rate equal to the conduit provider's weighted average cost related to the
issuance of certain commercial paper notes and other short term borrowings plus 0.30%, provided that portions of Tranche A that were held by the
ATSB or are held by an assignee and no longer subject to such commercial paper conduit program bear interest at LIBOR plus 40 basis points, and
portions of Tranche A that are under certain circumstances assigned free of the ATSB guarantee bear interest at LIBOR plus 6.0%; and
• 10% of the US Airways loan (Tranche B) bears interest at the greater of the Tranche A interest rate plus 6.0% and LIBOR plus 6.0%.
The US Airways loan also has amortization payments for US Airways with semi-annual payments beginning on March 31, 2007 and continuing through
September 30, 2010.
Certain third party counter-guarantors have fully and unconditionally guaranteed the payment of an aggregate amount of $11 million of the remaining
principal amount of the AWA loan, plus accrued and unpaid interest thereon, as of December 31, 2005. The AWA loan previously bore interest at a rate of
LIBOR plus 40 basis points, with a guarantee fee equal to 8.0% per annum with annual increases of 5 basis points. As a result of the sale of the AWA loan,
the non-guaranteed portion of the loan is no longer subject to the annual guarantee fee, but instead bears 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 on January 18, 2006, through the end of the loan term, payable on a
quarterly basis. The amortization payments under the AWA loan become due in seven installments of $42 million on each March 31 and September 30,
commencing on September 30, 2005 and ending on September 30, 2008. The AWA loan also requires a premium, in certain instances, for voluntary
prepayments. AWA made a voluntary prepayment of $9 million dollars in principal amount on September 27, 2005, prepaying in full the portion of the loan
subject to one of the counter-guarantees. This prepayment has been applied pro rata against each scheduled amortization payment. The AWA loan also
requires prepayments from the proceeds of specified asset sales.
Under the loans, 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 clearinghouses (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 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.
US Airways was required to pay down the principal of its loan with the first $125 million of net proceeds from specified asset sales identified in
connection with its Chapter 11 proceedings. US Airways 75