Amtrak 2013 Annual Report Download - page 75

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National Railroad Passenger Corporation and Subsidiaries (Amtrak)
Notes to Consolidated Financial Statements (continued)
1411-1359280 36
7. Mortgages and Debt (continued)
On February 15, 2012, Amtrak initiated a mandatory tender for purchase of the $45.0 million
Series B bonds. The Series B bonds were remarketed to a commercial bank that agreed to hold
the reissued Series B bonds (Series B 2012) for a period of five years. In connection with the
mandatory tender for purchase and the issuance of the Series B 2012 bonds, the interest rate was
converted to a tax-effected fraction of one-month London Interbank Offered Rate (“LIBOR”)
plus 0.65% per annum, which was an effective rate of 0.56% at September 30, 2013. The LIBOR
interest rate will continue unless or until converted to another interest rate mode by Amtrak. In
connection with this transaction, the Company and PEDFA executed and amended certain
provisions included in the existing bond documents and lease arrangements with PEDFA
On March 31, 2012, PEDFA issued $95.1 million of PEDFA exempt facilities revenue refunding
bonds (Series A 2012) to refund Series A of 2001 with varying maturities between November 1,
2013 and 2041. The interest rates on the bonds range from 3.0% to 5.0% (yields ranging from
1.1% to 4.7%), payable semiannually. The Series A 2012 Bonds were issued at a $4.6 million
premium, which is being amortized on a straight-line basis over the term of the new term debt.
The proceeds from the issuance and funds from the existing debt service reserve fund were used
to (i) refund the 2001 Series A bonds outstanding in the amount of $102.4 million; (ii) pay
accrued and unpaid interest on Series A bonds of $2.7 million; and (iii) pay the redemption
premium of $1.0 million and the issuance costs of $1.3 million. The issuance costs were
classified within “Deferred charges, deposits, and other” in the Consolidated Balance Sheets and
are being amortized to interest expense over the term of each bond issuance. In connection with
the refinancing, the Company adjusted its booked mortgage obligation and recorded a loss of
approximately $3.0 million, consisting of $1.0 million of redemption premium and $2.0 million
of unamortized discount / deferred financing costs related to the original issuance of the Series A
bonds. The loss was recognized and included in the Consolidated Statements of Operations as
“Loss on extinguishment of debt.”
As of both September 30, 2013 and 2012, $140.1 million of the Series A 2012 and Series B 2012
obligations remains outstanding. Amtrak guaranteed all principal and interest payments by
PEDFA on the Series A and Series B bonds.