9. Long-Term Debt

Long-term debt consisted of:


(in $ millions)	Maturity ⁽¹⁾	September 30, 2013		December 31, 2012
Secured debt
Senior Secured Credit Agreement
Revolver borrowings
Dollar denominated			—		20
Term loans
Dollar denominated	June 2019		1,528		—
Dollar denominated	August 2015		—		1,064
Euro denominated	August 2015		—		284
“Tranche S”	August 2015		—		137
2012 Secured Credit Agreement
Dollar denominated term loan	November 2015		—		171
Second Lien Credit Agreement
Tranche 1 dollar denominated term loan	January 2016		642		—
Tranche 2 dollar denominated term loan	December 2016		229		—
Second Priority Secured Notes
Dollar denominated floating rate notes	December 2016		—		225
Unsecured debt
Senior Notes
Dollar denominated floating rate notes	September 2014		—		122
Euro denominated floating rate notes	September 2014		—		201
9⁷/₈% Dollar denominated notes	September 2014		—		429
9% Dollar denominated notes	March 2016		—		250
13⁷/₈% Dollar denominated notes	March 2016		406		—
Dollar denominated floating rate notes	March 2016		186		—
Senior Subordinated Notes
11⁷/₈% Dollar denominated notes	September 2016		25		—
11⁷/₈% Dollar denominated notes	September 2016		247		247
10⁷/₈% Euro denominated notes	September 2016		189		184
Capital leases			91		96

Total debt			3,543		3,430
Less: current portion			38		38

Long-term debt			3,505		3,392

(1)

The term loans maturing in June 2019 and the revolver availability through June 2018 are subject to a reduction in maturity to November 2015, December 2015, June 2016 or September 2016 if the Company is unable to repay or refinance its outstanding debt under the Second Lien Credit Agreement or its unsecured debt prior to their maturity dates.

In April 2013, the Company completed an exchange offer for substantially all of its existing senior notes due in September 2014 and March 2016, including the dollar denominated floating rates notes due 2014, euro denominated floating rate notes due 2014, 9.875% dollar denominated notes due 2014 and 9% dollar denominated notes due 2016, for approximately $406 million of new 13.875% senior fixed rate notes due March 2016, bearing cash interest of 11.375% and 2.5% of interest payable as payment-in-kind interest, and approximately $185 million of new senior floating rate notes due March 2016 (together with the new senior fixed rate notes, the “Senior Notes”), bearing cash interest of LIBOR plus 6.125% and 2.5% of interest payable as payment-in-kind interest (the “Senior Notes Exchange Offers”). In connection with the Senior Notes Exchange Offers, the holders of the new Senior Notes provided a waiver and release of all claims asserted related to the Company’s refinancing in 2011. To facilitate the transactions:

•

The Company entered into a new second lien secured credit agreement (“Second Lien Credit Agreement”) and issued $630 million of Tranche 1 second priority secured loans, at a discount of 1%, due January 2016 (the “Tranche 1 Loans”). The cash proceeds were used to (i) repay $175 million of indebtedness outstanding under the credit agreement dated as of May 8, 2012 (the “2012 Secured Credit Agreement”), (ii) repay in cash $393 million as part of the Senior Notes Exchange Offers, and (iii) pay consent fees in connection with the Senior Notes Exchange Offers and consent solicitations. The Tranche 1 Loans bear cash interest of LIBOR plus 8%, with a minimum LIBOR floor of 1.5%. During May 2013, the Company further borrowed $15 million under the Second Lien Credit Agreement to redeem the outstanding senior notes held by holders who did not participate in the Senior Notes Exchange Offers. Tranche 1 Loans are subject to a 2% repayment fee, which is accreted as interest expense over the term of the loans. During the nine months ended September 30, 2013, $2 million was accreted into the outstanding loan amount.

•

The Company completed an exchange offer for its existing Second Priority Secured Notes due December 2016 for an equal principal amount of new term loans under the Second Lien Credit Agreement due December 2016 (the “Tranche 2 Loans”). The Tranche 2 Loans bear interest of 8.375% (cash interest of 4% and payment-in-kind interest of 4.375%).

•

The Company paid a consent fee to holders of the Company’s Senior Subordinated Notes in exchange for a waiver and release of all claims asserted in connection with the Company’s refinancing in 2011 and amended certain restrictive covenants under the indentures for the Senior Subordinated Notes.

•

The Company’s direct parent holding company, Travelport Holdings Limited (“Travelport Holdings”), acquired all of its outstanding Extended Tranche A Loans in exchange for (i) approximately 43.3% of the equity of Travelport Worldwide Limited (“Worldwide”), a parent company indirectly owning 100% of the Company, and (ii) $25 million of newly issued 11.875% Senior Subordinated Notes of the Company due September 2016, and acquired all of its outstanding Extended Tranche B Loans in exchange for approximately 34.6% of the equity of Worldwide.

In June 2013, the Company amended and restated its Senior Secured Credit Agreement (the “Sixth Amended and Restated Credit Agreement”) which, among other things, (i) refinanced in full the outstanding term loans, revolver borrowings and other commitments with the proceeds of a new $1,554 million term loan facility issued at a discount of 1.5% with a maturity date of June 2019 and an initial interest rate equal to LIBOR plus 5% (with a minimum LIBOR floor of 1.25%); (ii) provides for a new $120 million super priority revolving credit facility with a maturity date of June 2018 and an initial interest rate equal to LIBOR plus 4.25% (with a minimum LIBOR floor of 1.25%); (iii) provides for incremental term loan facilities subject to a 3.1 to 1.0 first lien leverage ratio test; (iv) amended the definition of Consolidated EBITDA to add back amortization of customer loyalty payments; and (v) amended certain financial covenants, including the total leverage ratio, the senior secured leverage ratio, the minimum liquidity ratio and limitations on indebtedness, investments and restricted payments. The Company is required to repay the term loans in quarterly installments equal to 1% per annum of the original funded principal amount of $1,554 million (adjusted for any subsequent prepayments), commencing September 2013. During the nine months ended September 30, 2013, the Company repaid $4 million as its first quarterly repayment, and $2 million of discount was amortized.

In June 2013, the Company amended its Second Lien Credit Agreement to amend the definitions of (i) Consolidated EBITDA; (ii) total leverage ratio and senior secured leverage ratio; and (iii) certain other definitions to conform to the amendments in Sixth Amended and Restated Credit Agreement.

As a result of the above comprehensive refinancings during the nine months ended September 30, 2013, the Company recognized a loss on extinguishment of debt of $49 million, which comprised of $39 million of written-off of unamortized debt finance costs, $5 million of unamortized debt discount written-off and $5 million of early repayment penalty.

Pursuant to the Sixth Amended and Restated Secured Credit Agreement, the Company’s total revolving credit facility is $120 million all of which remains undrawn as of September 30, 2013.

During the nine months ended September 30, 2013, the Company borrowed $53 million and repaid $73 million under its revolving credit facility.

As a result of the Company’s Sixth Amended and Restated Credit Agreement, the $13 million of synthetic letter of credit facility was terminated. Further, the $133 million of letter of credit facility, which was collateralized by $137 million of restricted cash funded from Tranche S loans, was also terminated and replaced with a new $137 million cash collateralized letter of credit facility, maturing in June 2018. The terms under the new letters of credit facility provide that 103% of cash collateral has to be maintained for outstanding letters of credit. As of September 30, 2013, $62 million of letters of credit were outstanding under the terms of the new facility, against which the Company had provided $64 million as cash collateral, and the Company had $75 million of remaining capacity under its letters of credit facility.

Pursuant to its separation agreement with Orbitz Worldwide, the Company was committed to provide up to $75 million of letters of credit on behalf of Orbitz Worldwide. However, subsequent to April 15, 2013, the date on which the Company completed its comprehensive refinancing, the Company and Orbitz Worldwide ceased to be controlled by affiliates of Blackstone, and the Company is no longer obligated to maintain or issue new letters of credit on behalf of Orbitz Worldwide. As of September 30, 2013, there were no significant letters of credit issued by the Company on behalf of Orbitz Worldwide, and substantially all of the previously issued letters of credit were cancelled.

During the nine months ended September 30, 2013, $6 million of payment-in-kind interest was capitalized into the Second Priority Secured Notes and Senior Notes. In addition, $10 million of payment-in-kind interest was accrued for the Senior Notes and Tranche 2 Loans and included within other non-current liabilities on the Company’s consolidated condensed balance sheets. The Company repaid $14 million under its capital lease obligations, terminated $1 million of capital leases and entered into $10 million of new capital leases for information technology assets.

Foreign exchange fluctuations resulted in a $6 million increase in the principal amount of euro denominated loans during the nine months ended September 30, 2013.

Debt Maturities

Aggregate maturities of debt are as follows:


(in $ millions)	Twelve Months Ending September 30, ⁽²⁾
2014		38
2015		37
2016		1,728
2017		259
2018		21
Thereafter ⁽¹⁾		1,460

		3,543

(1)

(2)

The above table excludes (i) $83 million of payment-in-kind interest and repayment fees that will be accrued over the term of the Tranche 2 Loans and Senior Notes and (ii) $28 million of debt discount on term loans under the Sixth Amendment and Restated Credit Agreement and Second Lien Credit Agreement.

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 Company’s consolidated condensed statements of operations. The movement in deferred financing costs is summarized below:


(in $ millions)	Nine Months Ended September 30, 2013
Balance as of January 1		74
Capitalization of debt finance costs		29
Amortization		(21)
Written-off as loss on extinguishment		(39)

Balance as of September 30		43

During the nine months ended September 30, 2013, the Company also incurred $21 million of debt finance costs and $5 million of early repayment penalty on term loans under the 2012 Secured Credit Agreement which were recorded directly in the Company’s consolidated condensed statement of operations in connection with the refinancing in the second quarter of 2013.