Avis 2008 Annual Report Download - page 98

COMMITTED CREDIT FACILITIES AND AVAILABLE FUNDING ARRANGEMENTS
At December 31, 2008, the committed credit facilities available to the Company and/or its subsidiaries at the corporate or Avis Budget Car
Rental level were as follows:
Total
Capacity
Outstanding
Borrowings
Letters of
Credit Issued
Available
Capacity
Revolving credit facility
(a)
$
1,150
$
-
$
816
$
334
Letter of credit facility
(b)
228
-
224
4
(a)
This secured revolving credit facility which was entered into by Avis Budget Car Rental in April 2006 and amended in December
2008, has a five year term and currently bears interest at one month LIBOR plus 400 basis points. The senior credit facilities, which
encompass the floating rate term loan and the revolving credit facility, are secured by pledges of all of the capital stock of all of the
Company’s direct or indirect domestic subsidiaries and up to 66% of the capital stock of each direct foreign subsidiary, subject to
certain exceptions, and liens on substantially all of the Company’s intellectual property and certain other real and personal property.
DEBT COVENANTS
The Company’s debt agreements contain restrictive covenants, including restrictions on dividends paid to the Company by certain of its
subsidiaries, the incurrence of additional indebtedness by the Company and certain of its subsidiaries, acquisitions, mergers, liquidations,
and sale and leaseback transactions. The senior credit facilities also contain a minimum EBITDA requirement (as defined in the senior credit
facilities). As of December 31, 2008, the Company is not aware of any instances of non-compliance with any of its financial covenants. The
indenture governing the Company’s senior unsecured notes prohibits it from incurring additional debt, subject to certain exceptions. The
Company is currently unable to rely on the exception which requires compliance with an interest coverage ratio.
Debt under vehicle programs (including related party debt due to Avis Budget Rental Car Funding (AESOP) LLC (“
Avis Budget Rental Car
Funding”)) consisted of:
(b)
Final maturity date is July 2010.
17.
Debt Under Vehicle Programs and Borrowing Arrangements
As of
December 31,
2008
As of
December 31,
2007
Debt due to Avis Budget Rental Car Funding
(a)
$
5,142
$
4,646
Budget Truck financing:
Budget Truck Funding program
(b)
316
246
Capital leases
126
204
Other
(c)
450
500
$
6,034
$
5,596
(a)
The increase principally reflects $468 million of incremental borrowings under the Company’s various debt arrangements to support
the acquisition of rental vehicles within the Company’s Domestic Car Rental operations during the year ended December 31, 2008.
(b)
The increase primarily reflects incremental borrowings under the Company’s conduit facility to support the acquisition of rental
vehicles within the Company’s Budget Truck rental fleet.
Avis Budget Rental Car Funding (AESOP) LLC . Avis Budget Rental Car Funding, an unconsolidated bankruptcy remote qualifying special
purpose limited liability company, issues private placement notes to investors as well as to bank conduit facilities. Avis Budget Rental Car
Funding then uses the proceeds from
F
-
35
(c)
The decrease primarily reflects the effect of foreign currency exchange movements.