DEBT FACILITIES

Long-term debt, net of transaction costs is as follows:



(amounts in millions)	2018		2017
Total recourse debt	$	1,174.9	$	1,192.8
Total non-recourse debt ⁽¹⁾	86.0		62.6
Total long-term debt	$	1,260.9	$	1,255.4
Less: current portion of long-term debt	35.2		31.2
Less: current portion of finance leases	17.0		20.7
	$	1,208.7	$	1,203.5
⁽¹⁾ Non-recourse debt is a debt in a subsidiary for which recourse is limited to the assets, equity, interest and undertaking of such subsidiary and not CAE Inc.

Details of the recourse debt are as follows:



	2018		2017
Unsecured senior notes ($125.0 and US$225.0 maturing between December 2019 and December 2027), floating interest rates based on bankers’ acceptances rate plus a spread on $50.0 million and interest rates ranging from 3.59% and 4.15% for remaining $75.0 and US$225.0	$	415.0	$	424.0
Unsecured senior notes of US$60.0 maturing in June 2019 (2017 - US$60.0), interest rate of 7.66% payable semi-annually in June and December	75.7		77.9
Unsecured senior notes (US$100.0 maturing in August 2021 and US$50.0 maturing in August 2026), average blended rate of 4.47% payable semi-annually in August and February	193.4		199.3
Obligations under finance lease, with various maturities from April 2018 to October 2036, interest rates from 3.49% to 10.68%	145.4		173.3
Term loan maturing in June 2018 of US$2.9 and £0.6 (2017 – US$14.6 and £2.8), combined coupon rate of post-swap debt of 8.01% (2017 – 7.97%)	5.1		23.6
R&D obligation from a government agency maturing in July 2029 (i)	167.7		160.5
R&D obligation from a government agency maturing in July 2035 (ii)	132.6		92.0
Term loan maturing in January 2020 of €1.3 (2017 – €2.0), floating interest rate of EURIBOR plus a spread	1.8		2.7
Term loans, with maturities between October 2020 and December 2021, of US$14.5 (2017 – US$18.7), average blended rate of 3.31%	18.7		24.9
Other debt of US$11.0 maturing March 2024, floating interest of 0.80%	14.2		14.6
Term loan maturing in December 2021 of US$4.1, average blended rate of 3.28%	5.3		—
Total recourse debt, net amount	$	1,174.9	$	1,192.8

(i) Represents an interest-bearing long-term obligation with the Government of Canada relative to Project Falcon, an R&D program that ended in fiscal 2014, for a maximum amount of $250.0 million. The discounted value of the debt recognized amounted to $167.7 million as at March 31, 2018 (2017 – $160.5 million);

(ii) Represents an interest-bearing long-term obligation with the Government of Canada relative to Project Innovate, an R&D program announced in fiscal 2014 and extending over five and a half years, for a maximum amount of $250.0 million. The aggregate amount recognized in fiscal 2018 was $226.5 million (2017 – $169.9 million). The discounted value of the debt recognized amounted to $132.6 million as at March 31, 2018 (2017 – $92.0 million).

Revolving credit facility

The Company has access to a revolving unsecured term credit facility maturing in September 2022. The available facility amount is US $550.0 million with an option, subject to the lender’s consent, to increase to a total amount of up to US $850.0 million. The facility has covenants requiring a minimum fixed charge coverage and a maximum debt coverage. The applicable interest rate on this revolving credit facility is variable, based on the bank’s prime rate, bankers’ acceptance rates or LIBOR plus a spread which depends on the credit rating assigned by Standard & Poor’s Rating Services. As at March 31, 2018 and 2017, the Company had no outstanding borrowings under its revolving credit facility.

Details of the non-recourse debt are as follows:



	2018		2017
Term loan maturing in April 2018 of £0.7 (2017 – £0.2), interest rate of 13.50%	$	1.3	$	0.4
Term loan maturing in March 2028 of US$43.5 (2017 – US$47.1), interest rate of LIBOR plus 2.50% (i)	55.8		62.2
Term loans, with maturities between June 2021 and December 2025, of US $22.3, floating interest rate of LIBOR plus a fixed spread	28.9		—
Total non-recourse debt, net amount	$	86.0	$	62.6

(i) Represents collateralized non-recourse financing for a term loan to finance a training centre in Brunei. The subsidiary may also avail an additional amount of up to US $12.0 million in the form of letters of credit.

Payments required to meet the retirement provisions of the long-term debt are as follows:



	2018			2017
No later than 1 year	$	35.6		$	31.9
Later than 1 year and no later than 5 years	450.2			414.8
Later than 5 years	631.7			638.2
Total payments required	$	1,117.5		$	1,084.9
Less: transaction costs	(2.0		)	(2.8		)
	$	1,115.5		$	1,082.1

Information on the change in liabilities for which cash flows have been classified as financing activities in the statement of cash flows is presented below.



		Revolving
	Unsecured Credit				Long-term			Finance
		Facilities			debt			Leases			Total
Balance at beginning of year		$	—		$	1,082.1		$	173.3		$	1,255.4
Changes from financing cash flows
Proceeds, net of transaction costs		106.0			37.8			—			143.8
Repayments		(106.0		)	(33.4		)	(25.0		)	(164.4		)
Total changes from financing cash flows		$	—		$	4.4		$	(25.0	)	$	(20.6	)
Additions through a business combination (Note 3)		—			37.7			—			37.7
Non-cash changes:
Effect of foreign currency exchange differences		—			(19.2		)	(3.7		)	(22.9		)
Others		—			(1.3		)	—			(1.3		)
Interests		—			11.8			0.8			12.6
Total non-cash changes		$	—		$	(8.7	)	$	(2.9	)	$	(11.6	)
Balance at end of year		$	—		$	1,115.5		$	145.4		$	1,260.9

The present value of the obligations under finance lease are as follows:



	2018		2017
Gross future minimum lease payments	$	201.8	$	240.4
Less: future finance charges on finance leases	47.2		58.3
Less: discounted guaranteed residual values of leased assets	9.2		8.8
Present value of future minimum lease payments	$	145.4	$	173.3

The future minimum lease payments of the obligations under finance lease are as follows:



					2018						2017
	Gross future			Present value of			Gross future			Present value of
	minimum lease			future minimum			minimum lease			future minimum
	payments			lease payments			payments			lease payments
No later than 1 year		$	25.8		$	17.0		$	30.1		$	20.7
Later than 1 year and no later than 5 years		105.8			81.0			123.3			92.0
Later than 5 years		70.2			47.4			87.0			60.6
		$	201.8		$	145.4		$	240.4		$	173.3

As at March 31, 2018, the Company is in compliance with all of its financial covenants.