Avis 2012 Annual Report Download - page 83

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F-27
COMMITTED CREDIT FACILITIES AND AVAILABLE FUNDING ARRANGEMENTS
At December 31, 2012, 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 maturing 2016 (a) (b)
$
1,500
$
-
$
631
$
869
Other facilities (c)
10
4
-
6
__________
(a) This revolving credit facility matures in May 2016 and bears interest of one month LIBOR plus 300 basis points.
(b) The senior credit facility, which encompasses the floating rate term loans and the revolving credit facility, 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 foreign
subsidiary directly owned by the Company’s domestic subsidiaries, subject to certain exceptions, and liens on substantially all of
the Company’s intellectual property and certain other real and personal property.
(c) These facilities encompass bank overdraft lines of credit and finance leases, bearing interest of 3.22% to 5.77% as of December
31, 2012.
At December 31, 2012, the Company had various uncommitted credit facilities available, under which it had drawn
approximately $38 million, which bear interest at rates of 0.42% to 5.97%.
In December 2012, the Company entered into a senior unsecured loan agreement in connection with the planned
acquisition of Zipcar. The senior unsecured loan agreement provides for a commitment of up to $250 million and
initially bears interest at the greater of LIBOR or 1%, plus 4.375%, subject to increases of 0.50% every three months
after initial funding, subject to a cap. Any borrowings under this loan agreement would mature on the seven-year
anniversary of the funding date.
DEBT COVENANTS
The agreements governing the Company’s indebtedness 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 Company’s senior credit
facility contains maximum leverage and minimum coverage ratio requirements. As of December 31, 2012, the Company
was in compliance with the financial covenants of its senior credit facility.
15. Debt Under Vehicle Programs and Borrowing Arrangements
Debt under vehicle programs (including related party debt due to Avis Budget Rental Car Funding (AESOP) LLC (“Avis
Budget Rental Car Funding”)) consisted of:
As of December 31,
2012
2011
Debt due to Avis Budget Rental Car Funding (a)
$
5,203
$
4,574
Budget Truck financing (b)
253
188
Capital leases (c)
315
348
Other (d)
1,035
454
$
6,806
$
5,564
__________
(a) The increase reflects increased borrowing within U.S. operations to fund an increase in the Company’s U.S. car rental fleet
assets.
(b) The increase reflects increased borrowings to fund 2012 vehicle purchases.
(c) The decrease reflects the payment of capital lease arrangements related to the Company’s International fleet.
(d) The increase primarily reflects an increase in borrowings related to the Company’s International fleet.
Avis Budget Rental Car Funding (AESOP) LLC. Avis Budget Rental Car Funding, an unconsolidated bankruptcy remote
qualifying special purpose limited liability company, issues privately placed notes to investors as well as to banks and
bank-sponsored conduit entities. Avis Budget Rental Car Funding uses the proceeds from its note issuances to make
loans to a wholly-owned subsidiary of the Company, AESOP Leasing LP (“AESOP Leasing”), on a continuing basis.
AESOP Leasing is required to use the proceeds of such loans to acquire or finance the acquisition of vehicles used in the
Company’s rental car operations. By issuing debt through the Avis Budget Rental Car Funding program, Avis Budget
pays a lower rate of interest than if it had issued debt directly to third parties. Avis Budget Rental Car Funding is not