Yes They Did!! In Full!!
They took out another loan to pay off the ATSB loan, so the loan is still being paid on and is not paid off.
On October 19, 2005, $777 million of the loans, of which $752 million was guaranteed by the ATSB, was sold by the lenders by order of the ATSB to 13 fixed income investors. The sale of the debt removed the ATSB guaranty, and the ATSB no longer has an interest in any of the Company's debt. The total outstanding balance of the loans as of December 31, 2005 was $801 million, of which $551 million is outstanding under the US Airways loan and $250 million is outstanding under the AWA loan. Terms associated with these loans remain unchanged, with the AWA loan terminating in 2008 and the US Airways loan terminating in 2010.
The US Airways loan bears interest as follows:
• 90% of the US Airways loan (Tranche A), which was the portion of the loan previously guaranteed by the ATSB, was originally funded through a participating lender's commercial paper conduit program and bears interest at a rate equal to the conduit provider's weighted average cost related to the issuance of certain commercial paper notes and other short term borrowings plus 0.30%, provided that portions of Tranche A that were held by the ATSB or are held by an assignee and are no longer subject to such commercial paper conduit program bear interest at LIBOR plus 40 basis points, and portions of Tranche A that are under certain circumstances assigned free of the ATSB guarantee bear interest at LIBOR plus 6.0%; and
• 10% of the US Airways loan (Tranche B) bears interest at the greater of the Tranche A interest rate plus 6.0% and LIBOR plus 6.0% from a prior rate of LIBOR plus 4.0%.
The US Airways loan also reschedules amortization payments for US Airways with semi-annual payments beginning on March 31, 2007, and continuing through September 30, 2010.
US Airways was required to pay down the principal of its loan with the first $125 million of net proceeds from specified asset sales identified in connection with its Chapter 11 proceedings, whether completed before or after emergence from bankruptcy. US Airways then retains the next $83 million of net proceeds from specified asset sales, and must prepay the principal of loan with 60% of net proceeds in excess of an aggregate of $208 million from specified asset sales. Any such asset sales proceeds up to $275 million are to be applied in order of maturity, and any such asset sales proceeds in excess of
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$275 million are to be applied pro rata across all maturities in accordance with the loan's early amortization provisions. US Airways made prepayments totaling $156 million in connection with these specified asset sales completed during 2005.
Certain third party counter-guarantors have fully and unconditionally guaranteed the payment of an aggregate amount of $11 million of the remaining principal amount of the AWA loan, plus accrued and unpaid interest thereon, as of December 31, 2005. The AWA loan previously bore interest at a rate of LIBOR plus 40 basis points, with a guarantee fee equal to 8.0% per annum with annual increases of 5 basis points. As a result of the sale of the AWA loan, the non-guaranteed portion of the loan is no longer subject to the annual guarantee fee, but instead bears interest at a rate per annum equal to LIBOR plus 840 basis points, increasing by 5 basis points on January 18 of each year, beginning January 18, 2006, through the end of the loan term, payable on a quarterly basis. The amortization payments under the AWA loan become due in seven installments of $42 million on each March 31 and September 30, commencing on September 30, 2005 and ending on September 30, 2008. The AWA loan also requires a premium, in certain instances, for voluntary prepayments. AWA made a voluntary prepayment of $9 million dollars in principal amount on September 27, 2005, after the closing of the AWA loan, prepaying in full the portion of the loan subject to one of the counter-guarantees, which prepayment has been applied pro rata against each scheduled amortization payment.
The terms of both amended and restated loans require US Airways Group to meet certain financial covenants, including minimum cash requirements and required minimum ratios of earnings before interest, taxes, depreciation, amortization and aircraft rent to fixed charges, starting with the quarter ended December 31, 2005. At December 31, 2005, the Company is in compliance with these covenants.
