1997 Annual Report - Four Seasons Hotels and Resorts

10. L O N G- T E R M D E B T:1997 1996Unsecured debentures (a) $ 100,000 $ —Unsecured notes (b) 8,598 147,383Bank credit facility (c) — 54,155Mortgage (d) 15,879 10,283Bank loan (note 2(a)) — 12,600Other long-term liabilities 15,764 15,568140,241 239,989Less amounts due within one year (1,290) (13,403)$ 138,951 $ 226,586(a) Unsecured debentures:The unsecured debentures, with a face value of $100,000, were issued on July 2, 1997 at a discount for $99,723, and are dueon July 2, 2002. The debentures bear interest at 6%, payable semi-annually, and are redeemable at the option of theCorporation, in whole or in part, at any time, at redemption prices provided for in the indenture.(b) Unsecured notes:The unsecured notes, with a face value at December 31, 1997 of US$6,000 (1996 – US$107,500), were issued onJune 30, 1993 at a discount, and are due on July 1, 2000. The notes bear interest at 9-1/8%, payable semi-annually, andare redeemable at the option of the Corporation, in whole or in part, at any time on or after July 1, 1998, at redemptionprices provided for in the indenture. The Corporation repurchased notes with a face value of US$101,500 during 1997(1996 – US$7,500) for US$108,178, which resulted in an accounting loss of $12,021. The notes repurchased have beencancelled by the Corporation. The repurchase was partly funded from the proceeds of the unsecured debentures issued inJuly 1997 (note (a) above).(c) Bank credit facility:The Corporation has a US$100,000 committed bank credit facility which matures in July 2002. As at December 31, 1997,no amounts (1996 – US$39,500) had been borrowed by the Corporation under this credit facility. Borrowings under thiscredit facility bear interest at LIBOR plus a spread ranging between 0.3% and 1% (LIBOR plus 1/2% during 1997 and 1996)depending upon certain criteria specified in the loan agreement, and are secured by a charge over virtually all of theCorporation’s Canadian assets.The balance outstanding under the bank credit facility as at December 31, 1996 was repaid from the proceeds of theequity issuance that the Corporation completed on February 12, 1997 (note 11(b)).(d) Mortgage:This amount in 1996 represents the Corporation’s proportionate share of a mortgage on The Ritz-Carlton Hotel Chicago.US$7,500 was due in 1997, and bore interest at the lower of LIBOR plus 2% and US prime plus 1%. The Corporationhad jointly and severally guaranteed US$3,000 of this proportionately consolidated debt.In January 1997, the mortgage was refinanced and the Corporation’s proportionately consolidated amount of therefinanced non-recourse mortgage was US$11,250. The refinanced mortgage bears interest at rates ranging from thelower of LIBOR plus 1.50% and US prime plus 0.50%, up to the lower of LIBOR plus 2.25% and US prime plus 1.25%,depending on certain financial tests. The mortgage is due in 2002, with annual repayments of US$225, payable in equalquarterly instalments. As at December 31, 1997, the outstanding mortgage was US$11,081. As a result of the refinancing,the Corporation was released from its guarantee of US$3,000, and US$3,461 was distributed to the Corporation.65Four Seasons Hotels Inc.