US Airways 2007 Annual Report Download - page 57

Table of Contents
adjusted Citicorp credit facility balance and (B) the applicable index margin will be the lower of 1.25% and the rate otherwise applicable
based upon the Citicorp credit facility principal balance, and (ii) if the credit ratings of the Citicorp credit facility by Moody's and S&P in
effect as of the last day of the most recently ended fiscal quarter are both at least two subgrades better than the credit ratings in effect on
March 23, 2007, then (A) the applicable LIBOR margin will be 2.00% and (B) the applicable index margin will be 1.00%. As of
December 31, 2007, the interest rate on the Citicorp credit facility was 7.28% based on a 2.50% LIBOR margin.
The Citicorp credit facility matures on March 23, 2014, and is repayable in seven annual installments with each of the first six
installments to be paid on each anniversary of the closing date in an amount equal to 1% of the initial aggregate principal amount of the
loan and the final installment to be paid on the maturity date in the amount of the full remaining balance of the loan.
In addition, the Citicorp credit facility requires certain mandatory prepayments upon the occurrence of certain events, establishes
certain financial covenants, including minimum cash requirements and maintenance of certain minimum ratios, contains customary
affirmative covenants and negative covenants and contains customary events of default. The Citicorp credit facility requires us to
maintain consolidated unrestricted cash and cash equivalents of not less than $1.25 billion, with not less than $750 million (subject to
partial reductions upon certain reductions in the outstanding principal amount of the loan) of that amount held in accounts subject to
control agreements, which would become restricted for use by us if certain adverse events occur per the terms of the agreement. At
December 31, 2007, we were in compliance with all debt covenants.
7% Senior Convertible Notes
US Airways Group received net proceeds of $139 million related to the 7% Senior Convertible Notes due 2020 that were issued on
September 30, 2005. The 7% notes are US Airways Group's senior unsecured obligations and rank equally in right of payment to its other
senior unsecured and unsubordinated indebtedness, and are effectively subordinated to its secured indebtedness to the extent of the value
of assets securing such indebtedness. The 7% notes are fully and unconditionally guaranteed, jointly and severally and on a senior
unsecured basis, by US Airways and AWA. The US Airways and AWA guarantees are the guarantors' unsecured obligations, rank
equally in right of payment to the other senior unsecured and unsubordinated indebtedness of the guarantors and are effectively
subordinated to the guarantors' secured indebtedness to the extent of the value of assets securing such indebtedness.
The 7% notes bear interest at the rate of 7% per year payable in cash semiannually in arrears on March 30 and September 30 of each
year, beginning March 30, 2006. The 7% notes mature on September 30, 2020. Holders may convert, at any time on or prior to maturity
or redemption, any outstanding notes (or portions thereof) into shares of US Airways Group's common stock, initially at a conversion rate
of 41.4508 shares of US Airways Group's common stock per $1,000 principal amount of 7% notes (equivalent to an initial conversion
price of approximately $24.12 per share of US Airways Group's common stock). If a holder elects to convert its 7% notes in connection
with certain specified fundamental changes that occur prior to October 5, 2015, the holder will be entitled to receive additional shares of
US Airways Group's common stock as a make whole premium upon conversion. In lieu of delivery of shares of US Airways Group's
common stock upon conversion of all or any portion of the 7% notes, US Airways Group may elect to pay holders surrendering 7% notes
for conversion cash or a combination of shares and cash.
Holders of the 7% notes may require US Airways Group to purchase for cash or shares or a combination thereof, at US Airways
Group's election, all or a portion of their notes on September 30, 2010 and September 30, 2015 at a purchase price equal to 100% of the
principal amount of the notes to be repurchased plus accrued and unpaid interest, if any, to the purchase date. In addition, if US Airways
Group experiences a fundamental change (as defined in the indenture governing the notes), holders may require US Airways Group to
purchase for cash, shares or a combination thereof, at its election, all or a portion of their notes, subject to specified exceptions, at a price
equal to 100% of the principal amount of the notes plus accrued and unpaid interest, if any, to the purchase date. Prior to October 5, 2010,
the notes will not be redeemable at US Airways Group's option. US Airways Group may redeem all or a portion of the notes at any time
on or after October 5, 2010, at a price equal to 100% of the principal amount of the notes plus accrued and unpaid interest, if any, to the
redemption date if the closing price of US
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