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Long-Term Debt

9 Months Ended

Sep. 30, 2012

8. Long-Term Debt

Long-term debt consisted of:


(in $ millions)	Maturity ⁽¹⁾	September 30, 2012		December 31, 2011
Secured debt
Senior Secured Credit Agreement
Term loans
Dollar denominated	August 2013		—		121
Euro denominated	August 2013		—		40
Dollar denominated	August 2015		1,064		1,067
Euro denominated	August 2015		277		279
“Tranche S”	August 2015		137		137
Revolver borrowings
Dollar denominated			35		35
2012 Secured Credit Agreement
Dollar denominated term loan	November 2015		170		—
Second Priority Secured Notes
Dollar denominated floating rate notes	December 2016		221		211
Unsecured debt
Senior Notes
Dollar denominated floating rate notes	September 2014		122		123
Euro denominated floating rate notes	September 2014		196		210
9⁷ /₈% Dollar denominated notes	September 2014		429		443
9% Dollar denominated notes	March 2016		250		250
Senior Subordinated Notes
11⁷ /₈% Dollar denominated notes	September 2016		247		247
10⁷ /₈% Euro denominated notes	September 2016		180		181
Capital leases			56		63

Total debt			3,384		3,407
Less: current portion			50		50

Long-term debt			3,334		3,357

(1)	The term loans maturing in August 2015 are subject to a reduction in maturity to May 2014 under certain circumstances.

On May 8, 2012, the Company entered into a credit agreement (the “2012 Secured Credit Agreement”) which: (i) allowed for $175 million of new term loans issued at a discount of 3%, secured on a junior priority basis to the term loans under the Senior Secured Credit Agreement and on a senior priority basis to the Second Priority Secured Notes; (ii) carries interest at USLIBOR plus 9.5% with a minimum USLIBOR floor of 1.5%, payable quarterly; and (iii) added a senior secured leverage ratio test, initially set at 4.95 until December 31, 2012.

Proceeds from the new term loans were used to repay in full $41 million of euro denominated terms loans due August 2013, $121 million of dollar denominated term loans due August 2013 and $3 million of dollar denominated term loans due August 2015.

During the nine months ended September 30, 2012, the Company repurchased $14 million of 9⁷/₈% dollar denominated Senior Notes, $11 million of euro denominated floating rate Senior Notes and $1 million of dollar denominated floating rate Senior Notes, resulting in a gain of $6 million.

Foreign exchange fluctuations resulted in a $5 million decrease in the principal amount of euro denominated long term debt during the nine months ended September 30, 2012. This foreign exchange gain was offset by $17 million of losses on foreign exchange derivative instruments (including $8 million of losses due to credit risk fair value adjustments) contracted by the Company.

During the nine months ended September 30, 2012, $10 million of interest was capitalized into the Second Priority Secured Notes, $13 million of capital lease obligations were repaid and the Company entered into $6 million of capital leases for information technology assets.

As of December 31, 2011, the Company had capacity to borrow $181 million under the revolving credit facility of the Senior Secured Credit Agreement. On May 8, 2012, the Company entered into a revolving credit loan modification agreement relating to the Senior Secured Credit Agreement that, among other things, extended the maturity date of $61 million of the revolving loans under the Senior Secured Credit Agreement to May 24, 2015 (February 2014 under certain circumstances). In August 2012, the Company entered into a separate agreement relating to $62 million of revolving credit facility loan set to expire in August 2012 that assigned the commitments to a Travelport subsidiary and extended the maturity date to August 2013. The remaining $57 million of capacity under the revolving credit facility remains unchanged and is due to expire in August 2013.

For the nine months ended September 30, 2012, the Company borrowed and repaid $60 million under the revolving credit facility. At September 30, 2012, the Company has outstanding borrowings to external lenders of $35 million under the revolving credit facility, with remaining external borrowing capacity of $83 million.

The Company has a $133 million letter of credit facility which matures in August 2015 and which is collateralized by $137 million of restricted cash. The Company also has a $13 million synthetic letter of credit facility which matures in August 2013. As of September 30, 2012, the Company had approximately $106 million of commitments outstanding under its cash collateralized letter of credit facility and $10 million of commitments outstanding under its synthetic letter of credit facility. The commitments under these two facilities included approximately $74 million in letters of credit issued by the Company on behalf of Orbitz Worldwide, pursuant to the Company’s separation agreement with Orbitz Worldwide. As of September 30, 2012, the Company had $30 million of remaining capacity under its letter of credit facilities.

Debt Finance Costs

Debt finance costs are capitalized within other non-current assets on the consolidated condensed balance sheets and amortized over the term of the related debt into earnings as part of interest expense in the consolidated condensed statement of operations. The movement in deferred financing costs is summarized below:


(in $ millions)
Balance as of January 1, 2012	98
Capitalization of debt finance costs	9
Amortization	(29	)

Balance as of September 30, 2012	78

Amortization of debt finance costs includes $5 million of debt finance costs written off due to early repayment of term loans.