US Airways 2007 Annual Report Download - page 156

Table of Contents
US Airways, Inc.
Notes to Consolidated Financial Statements — (Continued)
administrative agent, Citibank, N.A., as the initial lender, and the other lenders from time to time party thereto. Citibank, N.A.
subsequently assigned all of its interests in the notes to third party lenders.
AWA fully and unconditionally guaranteed the payment and performance of FTCHP's obligations under the notes and the loan
agreement. The notes require aggregate principal payments of $36 million with principal payments of $2 million due on each of
the first two anniversary dates and the remaining principal amount due on the fifth anniversary date. The notes may be prepaid in
full at any time (subject to customary LIBOR breakage costs) and in partial amounts of $2 million on the third and fourth
anniversary dates. The unpaid principal amount of the notes bears interest based on LIBOR plus a margin subject to adjustment
based on a loan to collateral value ratio.
The loan agreement contains customary covenants applicable to loans of this type, including obligations relating to the
preservation of the collateral and restrictions on the activities of FTCHP. In addition, the loan agreement contains events of
default, including payment defaults, cross-defaults to other debt of FTCHP, if any, breach of covenants, bankruptcy and
insolvency defaults and judgment defaults.
In connection with this financing, AWA sold all of its leasehold interests in the maintenance facility and flight training center to
FTCHP and entered into subleases for the facilities with FTCHP at lease rates expected to approximate the interest payments due
under the notes. In addition, AWA agreed to make future capital contributions to FTCHP in amounts sufficient to cover principal
payments and other amounts owing pursuant to the notes and the loan agreement. As part of the transfer of substantially all of
AWA's assets and liabilities to US Airways in connection with the combination of all mainline airline operations under one FAA
operating certificate on September 26, 2007, AWA assigned its subleases for the facilities with FTCHP to US Airways. In
addition, US Airways assumed all of the obligations of AWA in connection with the financing and joined the guarantee of the
payment and performance of FTCHP's obligations under the notes and the loan agreement.
(d) On March 23, 2007, US Airways Group entered into a new term loan credit facility with Citicorp North America, Inc., as
administrative agent, and a syndicate of lenders pursuant to which US Airways Group borrowed an aggregate principal amount of
$1.6 billion. US Airways is a guarantor of the Citicorp credit facility.
The proceeds of the Citicorp credit facility were used to repay in full the following indebtedness:
• The amended and restated loan agreement, dated April 7, 2006, entered into by US Airways Group with General Electric Capital
Corporation ("GECC") and a syndicate of lenders. At the time of the repayment, the total outstanding balance of the loan was
$1.25 billion.
• The Barclays prepaid miles issued on October 3, 2005 in connection with the amended co-branded credit card agreement dated
August 8, 2005 between pre-merger US Airways Group, AWA and Juniper Bank, a subsidiary of Barclays PLC that has since
been renamed Barclays Bank Delaware ("Barclays"). At the time of the repayment, the total outstanding balance was
$325 million.
• The credit facility with GECC, amended in July 2005 with an original balance of $28 million. At the time of the repayment, the
total outstanding balance of the loan was $19 million.
(e) In December 2004, deferred charges under US Airways' maintenance agreements with GE Engine Systems, Inc. were converted
into an unsecured term note. Interest on the note accrues at LIBOR plus 4%, and becomes payable beginning in January 2008, at
which time principal and interest payments are due in 48 monthly installments.
(f) The industrial development revenue bonds are due April 2023. Interest at 6.3% is payable semiannually on April 1 and October 1.
The bonds are subject to optional redemption prior to the maturity date on or after April 1, 2008, in whole or in part, on any
interest payment date at the following redemption prices: 102% on April 1 or October 1, 2008; 101% on April 1 or October 1,
2009; and 100% on April 1, 2010 and thereafter.
(g) In connection with US Airways Group's emergence from bankruptcy in September 2005, it reached a settlement with the PBGC
related to the termination of three of its defined benefit pension plans. The settlement included the issuance of a $10 million note
which matures in 2012 and bears interest at 6% payable annually in arrears.
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