Avis 2012 Annual Report Download - page 80

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F-24
14. Long-term Debt and Borrowing Arrangements
Long-term debt and other borrowing arrangements consisted of:
Maturity
As of December 31,
Date
2012
2011
Floating Rate Term Loan (a)
April 2014
$
-
$
267
Floating Rate Senior Notes
May 2014
250
250
7% Senior Notes
May 2014
-
200
3½% Convertible Senior Notes
October 2014
128
345
7¾% Senior Notes
May 2016
-
375
Floating Rate Term Loan (a)
May 2016
49
20
4% Senior Notes
November 2017
300
-
9% Senior Notes
March 2018
446
445
Floating Rate Term Loan (a)
September 2018
-
412
8¼% Senior Notes
January 2019
730
602
Floating Rate Term Loan (a)
March 2019
689
-
9¾% Senior Notes
March 2020
250
250
2,842
3,166
Other
63
39
Total
2,905
3,205
Less: Short-term debt and current portion of long-term debt
57
37
Long-term debt
$
2,848
$
3,168
__________
(a) The floating rate term loans are part of the Company’s senior credit facility, which includes its revolving credit facility maturing
2016, and is secured by pledges of all of the capital stock of all of the Company’s 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.
AVIS BUDGET GROUP, INC. CORPORATE DEBT
3½% Convertible Senior Notes
The Company’s 3½% Convertible Senior Notes due 2014 (the “Convertible Notes”) were issued in October 2009 at
100% of their face value for aggregate proceeds of $345 million. The Convertible Notes are general unsecured senior
obligations of the Company. The Convertible Notes are not redeemable by the Company prior to maturity; however, they
are convertible by the holders at any time prior to the second trading day before the maturity date of the Convertible
Notes. The initial conversion rate for the Convertible Notes is 61.5385 shares of common stock per $1,000 principal
amount, which is equal to an initial conversion price of approximately $16.25 per share. The Convertible Notes mature
October 1, 2014.
Holders may require the Company to repurchase, for cash, all or part of the Convertible Notes upon a “fundamental
change”, as defined under the indenture, at a price equal to 100% of the principal amount of the Convertible Notes being
repurchased plus any accrued and unpaid interest. In addition, upon a “make-whole fundamental change”, prior to the
maturity date of the Convertible Notes, the Company may, in some cases, increase the conversion rate for a holder that
elects to convert its notes in connection with such make-whole fundamental change. Under these “make-whole”
provisions, the Company could have been required to issue an additional 6.4 million shares to settle the Convertible
Notes; as of December 31, 2012, the maximum number of additional shares that the Company could be required to issue
under these “make-whole” provisions is 0.7 million shares. The Company initially designated 27.6 million shares
(including the shares that could be issued under the “make-whole” provisions) which it can issue to settle its obligation
upon conversion.
Concurrently with the issuance of the Convertible Notes, the Company purchased a convertible note hedge and entered
into a warrant transaction, which effectively increased the conversion price of the Convertible Notes, from the
Company’s perspective, to $22.50 per share. The convertible note hedge is intended to reduce the net number of shares
required to be issued upon conversion of the Convertible Notes. The significant terms of the convertible note hedge and
warrant transactions can be found in Note 17—Stockholders’ Equity.