Airtran 2010 Annual Report Download - page 95

During the fourth quarter of 2008, $5.3 million of the 5.5% convertible notes were converted to 1.4 million shares of our
common stock and $0.7 million was paid from the escrow account to the former note holders.
5.25% Convertible Senior Notes
In October 2009, we completed a public offering of $115.0 million of our convertible senior notes due in 2016, which we
refer to as the 5.25% convertible notes. The net proceeds from the offering were used for general corporate purposes
including improving our overall liquidity by providing working capital. Such notes bear interest at 5.25 percent payable
semi-annually, in arrears, on May 1 and November 1. The 5.25% convertible notes are senior unsecured obligations of
Holdings and rank equally with all existing and future senior unsecured obligations of Holdings. The 5.25% convertible
notes are effectively subordinated to all liabilities of our subsidiaries. The 5.25% convertible notes are convertible into
shares of our common stock at a conversion rate of 164.0420 shares per $1,000 in principal amount of such notes which
equals an initial conversion price of approximately $6.10 per share. This conversion rate is subject to adjustment in certain
circumstances. Holders may convert their 5.25% convertible notes into shares of our common stock at their option at any
time. The 5.25% convertible notes are not redeemable at our option prior to maturity. The holders of the 5.25%
convertible notes may require us to repurchase such notes, in whole or in part, for cash upon the occurrence of a
fundamental change, as defined in the governing supplemental indenture, at a repurchase price of 100 percent of principal
amounts plus any accrued and unpaid interest.
Credit Facility
We have a combined secured letter of credit facility and a revolving line of credit facility. We refer to the combined letter
of credit facility and revolving line of credit facility as the Credit Facility, and we refer to its components as the letter of
credit facility and the revolving line of credit facility, respectively. The terms of the Credit Facility were amended
effective July 1, 2010. The following discussion summarizes the terms of the amended Credit Facility.
Under the revolving line of credit facility, we are permitted to borrow, upon two business days notice, up to $50 million
for general corporate purposes. Under the letter of credit facility, we are entitled to the issuance by a financial institution
of letters of credit up to a maximum aggregate amount of $50 million for the benefit of one or more of our credit card
processors. Amounts borrowed under the revolving line of credit facility bear interest at a rate of 12 percent per annum
and must be repaid within three business days to the extent that our aggregate unrestricted cash and investment amount
exceeds $450 million at any time. We may borrow once a month and are permitted to repay amounts borrowed at any time
without penalty. As of December 31, 2009, December 31, 2010, and January 31, 2011, we had $125 million, $50 million,
and $0 outstanding borrowings under the revolving line of credit facility or a predecessor version thereof, respectively. As
of December 31, 2009, December 31, 2010, and January 31, 2011, the stated amount of the letter of credit issued for the
benefit of our largest credit card processor was $50 million. The term of the Credit Facility currently expires on December
31, 2012.
The aggregate of amounts borrowed and outstanding letters of credit under the Credit Facility is not permitted to exceed
the estimated value of the collateral securing such facility. Drawings under any letter of credit may be made only to satisfy
our obligation to a beneficiary credit card processor to cover chargebacks arising from tickets sold during the period of
exposure to be covered by the letter of credit. Drawings may be made by the processor only if we do not satisfy our
obligations to reimburse the credit card processor for chargebacks. None of the letters of credit issued in favor of a
processor have ever been drawn.
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