Thrifty Car Rental 2008 Annual Report Download - page 42

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(3) In February 2009, the Company paid in full the Liquidity Facility totaling $274.9 million.
(4) In February 2009, the Company paid in full the Conduit Facility totaling $215.0 million.
The Company also has self-insured liabilities related to third-party bodily injury and property damage
claims totaling $110 million that are not included in the contractual obligations and commitments table
above. See Note 18 of Notes to Consolidated Financial Statements.
Asset Backed Medium Term Notes
The asset backed medium term note program is comprised of $1.5 billion in asset backed medium term
notes with maturities ranging from 2010 to 2012. Borrowings under the asset backed medium term notes
are secured by eligible vehicle collateral and bear interest at fixed rates ranging from 4.58% to 5.27%
including certain floating rate notes swapped to fixed rates. The Company typically accesses the medium
term note market each year to replace maturing notes; however, the Company did not need to access this
market in 2008, and due to the current state of the credit markets, does not anticipate that the medium
term note market will be available in 2009. Proceeds from the asset backed medium term notes that are
temporarily not utilized for financing vehicles and certain related receivables are maintained in restricted
cash and investment accounts and are available for the purchase of vehicles. These amounts totaled
approximately $580.4 million at December 31, 2008.
In late February 2008, the Company amended the minimum net worth condition in three of its four
Monoline agreements to exclude the impact of any goodwill or other intangible asset impairment, while
the Company provided increased enhancement for the agreement not amended in order to comply with
the existing minimum net worth condition.
In February 2009, the Company amended all series of its asset backed medium term note program to be
able to operate a fleet comprised of 100% Non-Program Vehicles, while retaining the ability to purchase
Program Vehicles at its discretion to meet seasonal demand and allow flexibility in its defleeting cycle.
The asset backed medium term note programs each contain a minimum net worth condition and an
interest coverage covenant in the Monoline agreements. The Company was in compliance with these
conditions at December 31, 2008.
Conduit Facility
On May 8, 2008, the Company renewed its Variable Funding Note Purchase Facility (the “Conduit
Facility”) for another 364-day period with a capacity of $215 million. Proceeds are used for financing of
vehicle purchases and for a periodic refinancing of asset backed notes. The Conduit Facility generally
bears interest at market-based commercial paper rates and is renewed annually. At December 31, 2008,
the Company had $215 million outstanding under the Conduit Facility, which was paid in full in February
2009.
In conjunction with this renewal, the Company modified the minimum net worth covenant to exclude the
impact of any goodwill or other intangible asset impairment, and increased the percentage of Non-
Program Vehicles allowed. Additionally, a covenant was added to maintain a minimum level of excess
liquidity. The renewal resulted in higher fees and requires increased enhancement levels to be
maintained by the Company. The Company was in compliance with these covenants at December 31,
2008.
Commercial Paper Program and Liquidity Facility
At December 31, 2008, the Company’s commercial paper program (the “Commercial Paper Program”)
had a maximum capacity of $800 million supported by a 364-day liquidity facility (the “Liquidity Facility”) in
the amount of $278 million, which was paid in full in February 2009. At any time, the Company may only
issue commercial paper in an amount that does not exceed the sum of the Liquidity Facility and the letter
of credit supporting the commercial paper notes. Borrowings under the Commercial Paper Program are
secured by eligible vehicle collateral and bear interest at market-based commercial paper rates. In May
2008, the Company modified the minimum net worth covenant to exclude the impact of any goodwill or
other intangible asset impairment, and increased the percentage of Non-Program Vehicles allowed.
Additionally, a covenant was added to maintain a minimum level of excess liquidity.
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