trend-defying growth expansion 2012 - Edmonton Airports ...

Edmonton Regional Airports Authority
NOTEs TO FINANcIAL sTATEmENTs
December 31, 2008 and 2007
(in thousands of dollars, unless otherwise noted)
cash, Letter of Credit or undrawn availability of the
Royal Bank credit facilities described below.
Throughout the term when the bonds are outstanding,
Edmonton Airports is required to maintain a Debt
Service Coverage Ratio on a rolling 12 months basis
of 1.00:1 and a Gross Debt Service Coverage Ratio
of not less than 1.25:1. All covenants have been met.
In addition to the Revenue Bond issuance, Edmonton
Airports maintains, with the Royal Bank of Canada,
a three-year term, $5 million revolving credit
facility to support operations, and a $40 million
term revolving loan (“Series B Bonds”) for general
corporate purposes and to assist in the interim
financing of construction projects. The credit facility
was renewed in 2006 for another three-year term and
no drawdowns on the credit facility were made in
2008 (2007 – $nil). As at December 31, 2008, $13,552
(2007 – $11,670) of the term revolving loan had
been set aside for the Operating and Maintenance
Contingency Fund.
Pledged as collateral to the bonds are a first leasehold
mortgage on the International Airport and related
Amended Canada Lease; a security interest over
all of the present and future personal property of
Edmonton Airports including without limitation,
all book debts, and all sources of revenue and all
assets and any reserve funds, and a floating charge
over all of the other present and future property
and assets of Edmonton Airports.
b) Series C Bond
Edmonton Airports under its existing capital
markets platform entered into a Credit Agreement
(“Agreement”) with the Alberta Capital Finance
Authority (“ACFA”) on December 6, 2006. On
March 19, 2008 the Credit Agreement was amended
(“Amended Agreement”) in order for Edmonton
Airports to finance a $1.1 billion capital expansion
program at the International Airport. The Amended
Agreement contains two Credit Facilities. During
2008 Credit Facility 1 increased by $800 million to
$1.0 billion, by way of Fixed Rate Loans, and is to be
used solely for the purposes of Airport Infrastructure
Expenditures at the International Airport. Credit
Facility 2, for $300 million, by way of Fixed Rate
Loans, is to be used firstly for the purposes of
redeeming (or purchasing for cancellation pursuant
to section 3.23 of the Indenture) the Series A Bonds
and the Series B Bonds. The Amended Agreement
restricts any drawdown of the final $50 million of
Credit Facility 2 until all the Series B Bonds are
redeemed. Once Series A and Series B Bonds are fully
redeemed any residual balance in Credit Facility 2
can be used for the same purposes as Credit Facility 1.
Throughout the period when debentures are
outstanding, Edmonton Airports is required to
maintain an interest coverage ratio of not less than
1.25:1 and net cash flows greater than zero as of
the end of any fiscal quarter on a rolling four fiscal
quarter basis. All covenants have been met.
The collateral pledged under the Agreement ranks
pari passu with the Series A and Series B Bonds.
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