Dollar Rent A Car 2011 Annual Report Download - page 69

The assets of RCFC, including revenue-earning vehicles related to the asset-backed medium-term notes, restricted cash and investments, and certain
receivables related to revenue-earning vehicles, are available to satisfy the claims of its creditors. Dollar and Thrifty lease vehicles from RCFC under the
terms of certain master lease and servicing agreements. The asset-backed note indentures also provide for additional credit enhancement through over
collateralization of the vehicle fleet, cash or letters of credit and/or maintenance of a liquidity reserve. RCFC is in compliance with the terms of the
indentures.
Variable Funding Notes
The Series 2010-1 variable funding note (“VFN”) of $200 million and the Series 2010-2 VFN of $300 million were both terminated in October of 2011.
On September 29, 2011, RCFC renewed the Series 2010-3 VFN, increasing the capacity from $450 million to $600 million and extending the
revolving period from the previous 364-day structure to two years. The facility bears interest at a spread of 130 basis points above each funding
institution’s cost of funds, which may be based on either the weighted-average commercial paper rate, a floating one-month LIBOR rate or a Eurodollar
rate. The Series 2010-3 VFN was undrawn at December 31, 2011. The Series 2010-3 VFN has a facility fee commitment rate of up to 0.8% per
annum on any unused portion of the facility. At the end of the revolving period, the then-outstanding principal amount of the Series 2010-3 VFN will
be repaid monthly over a three-month period, beginning in October 2013, with the final payment in December 2013. At December 31, 2011, the Series
2010-3 VFN required compliance with a maximum leverage ratio of 2.25 to 1.00 and a minimum interest coverage ratio of 2.00 to 1.00, consistent with
the terms of the Company’s Senior Secured Credit Facilities. These financial covenants were modified in connection with the Company’s entry into the
New Revolving Credit Facility. See below for further discussion.
Canadian Fleet Financing
On April 18, 2011, due to the Company’s excess cash position and the cost differential between the interest rate on its Canadian fleet financing and
interest rates earned on investment of excess cash, the Company fully repaid the outstanding balance of CAD $54.0 million (US $56.0 million) and
terminated the CAD Series 2010 Program. During the remainder of 2011, the Company funded any Canadian fleet needs with cash on hand and cash
generated from operations. Direct investments in the Canadian fleet funded from cash and cash equivalents totaled CAD $64.9 million (US $63.5
million) as of December 31, 2011.
Senior Secured Credit Facilities
At December 31, 2011, the senior secured credit facilities (the “Senior Secured Credit Facilities”), which were refinanced and terminated in February
2012, were comprised of a $231.3 million revolving credit facility (the “Revolving Credit Facility”) as the term loan portion of the Senior Secured
Credit Facilities was repaid at $143.1 million and terminated in August 2011.
The Company had letters of credit outstanding under the Revolving Credit Facility of $144.3 million for U.S. enhancement and $54.7 million in
general purpose enhancements, with remaining available capacity of $32.3 million at December 31, 2011.
On February 16, 2012, the Company terminated the existing Senior Secured Credit Facilities and replaced it with a new $450 million revolving credit
facility (the “New Revolving Credit Facility”) that expires in February 2017. Pricing under the New Revolving Credit Facility is grid based with a
spread above LIBOR that will range from 300 basis points to 350 basis points, based upon usage of the facility. Commitment fees under the New
Revolving Credit Facility will equal 50 basis points on unused capacity. Under the New Revolving Credit Facility, the Company is subject to a
maximum corporate leverage ratio of 3.0 to 1.0, a minimum corporate interest coverage ratio of 2.0 to 1.0, and a minimum corporate EBITDA
requirement of $75 million.
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