DELPHI 2012 Annual Report Download - page 103

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The applicable interest rates listed above for the Revolving Credit Facility and the Tranche A Term Loan may increase or
decrease from time to time in increments of 0.25% or 0.50%, up to a maximum of 1.00%, based upon changes to our corporate
credit ratings. Accordingly, the interest rate will fluctuate during the term of the Credit Agreement based on changes in the
ABR, LIBOR or future changes in our corporate credit ratings. The Credit Agreement also requires that the Issuer pay certain
commitment fees on the unused portion of the Revolving Credit Facility and certain letter of credit issuance and fronting fees.
Delphi Corporation is obligated to make quarterly principal payments throughout the terms of the Tranche A and Tranche
B Term Loans according to the amortization schedule in the Credit Agreement. Borrowings under the Credit Agreement are
prepayable at the Issuer's option without premium or penalty, provided that any prepayment of the Tranche B Term Loan is
accompanied by a pro rata payment of the Tranche A Term Loan (based on the respective amounts then outstanding). The Issuer
may request that all or a portion of the Term Loans be converted to extend the scheduled maturity date(s) with respect to all or a
portion of any principal amount of such Term Loans under certain conditions. In conjunction with repayments made during the
year ended December 31, 2011, all quarterly principal payment obligations prior to maturity have been satisfied for the Tranche
B Term Loan and quarterly principal payments had previously been satisfied through December 31, 2013 for the Tranche A
Term Loan and partially satisfied through March 31, 2014. Effective with the draw of the additional $363 million in Tranche A
Term Loan funding in October 2012 as described above the mandatory repayment schedule was reset, quarterly Tranche A
Term Loan principal payments were made as of December 31, 2012 and continue through the maturity of the loan. The Credit
Agreement also contains certain mandatory prepayment provisions in the event the Company generates excess cash flow (as
defined in the Credit Agreement) or Delphi receives net cash proceeds from any asset sale or casualty event. No mandatory
prepayments, under these provisions, have been made or are due through December 31, 2012.
The interest rate period with respect to London Interbank Offered Rate (“LIBOR”) interest rate options can be set at
one-, two-, three-, or six-months as selected by Delphi Corporation in accordance with the terms of the Credit Agreement (or
other period as may be agreed by the applicable lenders), but payable no less than quarterly. Delphi Corporation may elect to
change the selected interest rate over the term of the Credit Facilities in accordance with the provisions of the Credit
Agreement. As of December 31, 2012, Delphi Corporation selected the one-month LIBOR interest rate option, as detailed in
the table below, and the amounts outstanding, net of the discount (in millions) and rates effective as of December 31, 2012 were
based on Delphi’s current credit rating and applicable margin for the Credit Agreement:
Borrowings as of Rates effective as of
LIBOR plus December 31, 2012 December 31, 2012
Revolving Credit Facility ..................................................... 2.00% $ — —%
Tranche A Term Loan........................................................... 2.00% 567 2.25%
Tranche B Term Loan........................................................... 2.50% 772 3.50% *
* Includes LIBOR floor of 1.00%.
The Credit Agreement contains certain covenants that limit, among other things, the Company’s (and the Company’s
subsidiaries’) ability to incur additional indebtedness or liens, to dispose of assets, to make certain investments, to prepay
certain indebtedness and to pay dividends, or to make other distributions or redemptions/repurchases, in respect of the
Company’s equity interests. In addition, the Credit Agreement requires that the Company maintain a consolidated leverage ratio
(the ratio of Consolidated Total Indebtedness to Consolidated EBITDA, each as defined in the Credit Agreement) of less than
2.75 to 1.0. The Credit Agreement also contains events of default customary for financings of this type. The Company was in
compliance with the Credit Agreement covenants as of December 31, 2012.
All obligations under the Credit Agreement are borrowed by Delphi Corporation and jointly and severally guaranteed by
its direct and indirect parent companies and by certain of Delphi Automotive PLC’s existing and future direct and indirect
subsidiaries, subject to certain exceptions set forth in the Credit Agreement. All obligations under the Credit Agreement,
including the guarantees of those obligations, are secured by certain assets of Delphi Corporation and the guarantors, including
substantially all of the assets of Delphi Automotive PLC, and its U.S. subsidiaries, and certain assets of Delphi Corporation’s
direct and indirect parent companies.
Senior Notes
On May 17, 2011, Delphi Corporation issued $500 million of 5.875% senior notes due 2019 and $500 million of 6.125%
senior notes due 2021 (the “Senior Notes”) in a transaction exempt from registration under Rule 144A and Regulation S of the
Securities Act. Delphi paid approximately $23 million of debt issuance costs in connection with the Senior Notes. The net
proceeds of approximately $1 billion as well as cash on hand were used to pay down amounts outstanding under the Credit
Agreement. In May 2012, Delphi Corporation exchanged all of the Senior Notes for registered notes ("New Senior Notes")
with terms identical in all material respects to the terms of the Senior Notes, except that the New Senior Notes are registered
under the Securities Act of 1933 (the “Securities Act”), and the transfer restrictions and registration rights relating to the Senior