DEBT FACILITIES

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



(amounts in millions)		2019		2018
Total recourse debt	$	2,275.3	$	1,174.9
Total non-recourse debt ⁽¹⁾		53.0		86.0
Total long-term debt	$	2,328.3	$	1,260.9
Less: current portion of long-term debt		201.3		35.2
Less: current portion of finance leases		62.8		17.0
	$	2,064.2	$	1,208.7
⁽¹⁾ Non-recourse debt is a debt in a subsidiary for which recourse is limited to the assets and undertaking of such subsidiary and not CAE Inc.

Details of the recourse debt are as follows:



		2019		2018
Unsecured senior notes of US$450.0 (2018 – nil), maturing between March 2029 and March 2034, interest rates ranging from 4.47% and 4.72% (i)	$	598.2	$	—
Unsecured senior notes of $125.0 (2018 - $125.0) and US$225.0 (2018 – 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		424.6		415.0
Unsecured senior notes of US$200.0 (2018 – US$150.0) maturing between August 2026 and March 2033 (2018 – August 2021 and August 2026), average blended rate of 4.44% (ii)		265.3		193.4
Unsecured senior notes of US$60.0 (2018 – US$60.0) maturing in June 2019, interest rate of 7.66%		80.1		75.7
Obligations under finance lease, with various maturities from September 2019 to October 2036, interest rates from 3.54% to 10.68%		259.3		145.4
R&D obligation from a government agency maturing in July 2029 (iii)		174.2		167.7
R&D obligation from a government agency maturing in July 2035 (iv)		153.7		132.6
R&D obligation from a government agency maturing in April 2039 (v)		14.6		—
R&D obligation from a government agency maturing in September 2028 (vi)		6.0		—
Term loan of US$150.0 (2018 – nil), maturing between March 2021 and March 2024, floating interest of LIBOR plus a spread		199.0		—
Term loan maturing in April 2028, floating interest rate of CDOR plus a spread		51.9		—
Other debts		48.4		45.1
Total recourse debt, net amount	$	2,275.3	$	1,174.9


(i)	In December 2018, the Company entered into an agreement to issue a series of unsecured senior notes of US$550.0 million. As at March 31, 2019, the Company has issued notes for US$450.0 million and will issue an additional US$100.0 million in fiscal 2020 for the refinancing of existing debt in December 2019;


(ii)	On March 27, 2019, the Company entered into an agreement to refinance a portion of its unsecured senior notes due August 2021. The unsecured senior notes of US$100.0 million were increased to a total amount of US$150.0 million, and their maturity date extended from August 2021 to March 2033;


(iii)	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 $174.2 million as at March 31, 2019 (2018 – $167.7 million);

(iv)

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 2019 was $250.0 million (2018 – $226.5 million). The discounted value of the debt recognized amounted to $153.7 million as at March 31, 2019 (2018 – $132.6 million);


(v)	Represents an interest-free long-term obligation with the Government of Canada relative to R&D programs announced in fiscal 2019 and extending over five years, for a maximum amount of $150.0 million. The aggregate amount recognized in fiscal 2019 was $36.9 million (2018 – nil). The discounted value of the debt recognized amounted to $14.6 million (2018 – nil);


(vi)	Represents an interest-free long-term obligation with the Government of Quebec relative to R&D programs announced in fiscal 2019 and extending over five years, for a maximum amount of $47.5 million. The aggregate amount recognized in fiscal 2019 was $10.9 million (2018 – nil). The discounted value of the debt recognized amounted to $6.0 million (2018 – nil).

Revolving credit facility

The Company has access to a revolving unsecured term credit facility maturing in September 2023. 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, 2019 and 2018, the Company had no outstanding borrowings under its revolving credit facility.

Details of the non-recourse debt are as follows:



		2019		2018
Term loan of US$39.9 (2018 – US$43.5) maturing in March 2028, interest rate of LIBOR plus 2.50% (i)	$	53.0	$	55.8
Term loans repaid during fiscal 2019 (2018 – US$22.3), floating interest rate of LIBOR plus a fixed spread		—		28.9
Term loan matured in April 2018 (2018 – £0.7), interest rate of 13.50%		—		1.3
Total non-recourse debt, net amount	$	53.0	$	86.0

(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:



		2019			2018
No later than 1 year	$	202.0		$	35.6
Later than 1 year and no later than 5 years		414.0			450.2
Later than 5 years		1,460.1			631.7
Total payments required	$	2,076.1		$	1,117.5
Less: transaction costs		(7.1	)		(2.0	)
	$	2,069.0		$	1,115.5

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	$	—		$	1,115.5		$	145.4		$	1,260.9
Changes from financing cash flows
Proceeds, net of transaction costs		749.0			955.3			—			1,704.3
Repayments		(749.0	)		(72.7	)		(22.0	)		(843.7	)
Total changes from financing cash flows	$	—		$	882.6		$	(22.0	)	$	860.6
Additions through acquisition of subsidiaries (Note 3)		—			15.2			137.6			152.8
Non-cash changes:
Effect of foreign currency exchange differences		—			24.3			5.0			29.3
Interests		—			13.8			0.8			14.6
Others		—			17.6			(7.5	)		10.1
Total non-cash changes	$	—		$	55.7		$	(1.7	)	$	54.0
Balance at end of year	$	—		$	2,069.0		$	259.3		$	2,328.3

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



		2019		2018
Gross future minimum lease payments	$	308.0	$	201.8
Less: future finance charges on finance leases		48.7		47.2
Less: discounted guaranteed residual values of leased assets		—		9.2
Present value of future minimum lease payments	$	259.3	$	145.4

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



				2019				2018
	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	$	73.5	$	62.8	$	25.8	$	17.0
Later than 1 year and no later than 5 years		181.6		161.2		105.8		81.0
Later than 5 years		52.9		35.3		70.2		47.4
	$	308.0	$	259.3	$	201.8	$	145.4

As at March 31, 2019, the Company is in compliance with all of its financial covenants.