DELPHI 2014 Annual Report Download - page 105

83
Credit Agreement
In March 2011, in conjunction with the redemption of membership interests from Class A and Class C membership
interest holders, Delphi Corporation (the "Issuer") entered into a credit agreement with JPMorgan Chase Bank, N.A., as lead
arranger and administrative agent (the “Original Credit Agreement”), which provided for $3.0 billion in senior secured credit
facilities consisting of term loans (as subsequently amended from time to time, the “Tranche A Term Loan” and the “Tranche B
Term Loan,” respectively) and a revolving credit facility (as subsequently amended from time to time, the “Revolving Credit
Facility”). The Original Credit Agreement was amended and restated on each of May 17, 2011 (the “May 2011 Credit
Agreement”), September 14, 2012 (the “2012 Credit Agreement”) and March 1, 2013 (the Original Credit Agreement and each
amendment and restatement of the Original Credit Agreement are individually and collectively referred to herein as the “Credit
Agreement”). The May 2011 Credit Agreement, which was entered into simultaneously with the issuance of senior unsecured
notes in the amount of $1 billion (as more fully described below), reduced the total size of the senior secured credit facilities to
$2.4 billion. Under the 2012 Credit Agreement, the Company increased the Revolving Credit Facility to $1.3 billion and the
Tranche A Term Loan to $574 million and used the incremental proceeds to pay a portion of the cost of acquiring MVL. On
March 1, 2013, following the unsecured note issuance in February 2013 (as more fully described below), the Tranche B Term
Loan was fully repaid, the Tranche A Term Loan was increased to $575 million, the Revolving Credit Facility was increased to
$1.5 billion, and the terms of the Tranche A Term Loan and the Revolving Credit Facility were extended to March 1, 2018. The
March 31, 2013 amendments resulted in the recognition of a loss on debt extinguishment of $39 million during the year ended
December 31, 2013. Approximately $14 million in issuance costs were paid in connection with the March 2013 amendment. In
conjunction with an unsecured note issuance in March 2014 (as more fully described below), Delphi repaid a portion of its
indebtedness on the Tranche A Term Loan, which resulted in the recognition of a loss on debt extinguishment related to this
repayment of approximately $1 million during the year ended December 31, 2014.
Unamortized debt issuance costs associated with the Tranche A Term Loan and Revolving Credit Facility of $19 million
are being amortized over the term of the Credit Agreement, as extended pursuant to the March 1, 2013 amendment. At
December 31, 2014, the Revolving Credit Facility was undrawn and Delphi had approximately $12 million in letters of credit
issued under the Credit Agreement. Letters of credit issued under the Credit Agreement reduce availability under the Revolving
Credit Facility.
Loans under the Credit Agreement bear interest, at Delphi Corporation's option, at either (a) the Administrative Agent’s
Alternate Base Rate (“ABR” as defined in the Credit Agreement) or (b) the London Interbank Offered Rate (the “Adjusted
LIBO Rate” as defined in the Credit Agreement) (“LIBOR”) plus in either case a percentage per annum as set forth in the table
below (the “Applicable Rate”). The Applicable Rates under the Credit Agreement on the specified dates are set forth below:
December 31, 2014 December 31, 2013
LIBOR plus ABR plus LIBOR plus ABR plus
Revolving Credit Facility .................................................... 1.00% 0.25% 1.25% 0.25%
Tranche A Term Loan.......................................................... 1.00% 0.25% 1.25% 0.25%
The Applicable Rate under the Credit Agreement may increase or decrease from time to time based on changes in credit
ratings with the minimum interest level of 0.00% and maximum level of 2.25%. 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.
The interest rate period with respect to LIBOR interest rate options can be set at one-, two-, three- or six-months as
selected by the Issuer 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. The Issuer may elect to change the selected interest rate in accordance with the
provisions of the Credit Agreement. As of December 31, 2014, the Issuer selected the one-month LIBOR interest rate option, as
detailed in the table below, and the amounts outstanding, and rates effective as of December 31, 2014 were based on Delphi’s
current credit rating and the Applicable Rate for the Credit Agreement:
Borrowings as of
December 31, 2014 Rates effective as of
LIBOR plus (in millions) December 31, 2014
Revolving Credit Facility.................................................................... 1.00% $ — —%
Tranche A Term Loan
.......................................................................... 1.00% 400 1.1875%
The Issuer was obligated to make quarterly principal payments throughout the term of the Tranche A Term Loan
according to the amortization schedule in the Credit Agreement. In conjunction with the partial repayment of the Tranche A