US Airways 2011 Annual Report Download - page 91

Table of Contents
4. Debt
The following table details the Company's debt (in millions). Variable interest rates listed are the rates as of December 31, 2011.
December 31, December 31,
2011 2010
Secured
Citicorp North America loan, variable interest rate of 2.80%, installments due through 2014 (a) $ 1,136 $ 1,152
Equipment loans and other notes payable, fixed and variable interest rates ranging from 1.67% to 10.48%, maturing from
2012 to 2029 (b) 1,729 1,920
Aircraft enhanced equipment trust certificates ("EETCs"), fixed interest rates ranging from 6.25% to 11%, maturing from
2014 to 2023 (c) 1,279 809
Other secured obligations, fixed interest rate of 8%, maturing from 2018 to 2021 30 85
4,174 3,966
Unsecured
Barclays prepaid miles, variable interest rate of 5.05%, interest only payments (d) 200 200
Airbus advance, repayments through 2018 (e) 142 222
7.25% convertible senior notes, interest only payments until due in 2014 (f) 172 172
7% senior convertible notes, interest only payments until due in 2020 5 5
Industrial development bonds, fixed interest rate of 6.3%, interest only payments until due in 2023 (g) 29 29
Other unsecured obligations, maturing in 2012 10 23
558 651
Total long-term debt and capital lease obligations 4,732 4,617
Less: Total unamortized discount on debt (166) (217)
Current maturities (436) (397)
Long-term debt and capital lease obligations, net of current maturities $ 4,130 $ 4,003
(a) On March 23, 2007, US Airways Group entered into a term loan credit facility (the "Citicorp 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 and certain other subsidiaries of US Airways Group are guarantors of the Citicorp credit facility.
The Citicorp credit facility bears interest at an index rate plus an applicable index margin or, at the Company's option, LIBOR plus an applicable
LIBOR margin for interest periods of one, two, three or six months. The applicable index margin, subject to adjustment, is 1.00%, 1.25% or 1.50% if
the adjusted loan balance is less than $600 million, between $600 million and $1 billion, or greater than $1 billion, respectively. The applicable LIBOR
margin, subject to adjustment, is 2.00%, 2.25% or 2.50% if the adjusted loan balance is less than $600 million, between $600 million and $1 billion, or
greater than $1 billion, respectively. In addition, interest on the Citicorp credit facility may be adjusted based on the credit rating for the Citicorp credit
facility as follows: (i) 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 one subgrade better than the credit ratings in effect on March 23, 2007, then (A) the applicable LIBOR margin will be the lower
of 2.25% and the rate otherwise applicable based upon the 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, 2011, the interest rate on the Citicorp credit facility was 2.80% 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 specified 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 the Company to maintain consolidated unrestricted cash and
cash equivalents of not less than $850 million, 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 the Company if
certain adverse events occur per the terms of the agreement. In addition, the Citicorp credit facility provides that the Company may issue debt in the
future with a second lien on the assets pledged as collateral under the Citicorp credit facility.
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