4. Debt

In April 2015, we refinanced our $480 million 2019 Notes (as defined below) through the issuance of $530 million senior secured notes due in 2023 with a stated interest rate of 5.375% (“2023 Notes”). The 2023 Notes were issued by Sabre GLBL Inc. and are guaranteed by Sabre Holdings and each of Sabre GLBL Inc.’s existing and subsequently acquired or organized subsidiaries that are borrowers under or guarantors of the Amended and Restated Credit Agreement (as defined below). The 2023 Notes are secured by a first priority security interest in substantially all present and after acquired property and assets of Sabre GLBL Inc. and the guarantors of the notes, which also constitutes collateral securing indebtedness under the Amended and Restated Credit Agreement on a first priority basis. We received proceeds of approximately $522 million, net of underwriting fees and commissions, from the 2023 Notes which were used to redeem all of the $480 million principal of the 2019 Notes, pay the 6.375% redemption premium of $31 million and the make whole premium of $2 million representing scheduled interest payable for the period between the redemption date of April 29, 2015 and the first call date of May 15, 2015. The remaining proceeds, combined with cash on hand, were used to pay accrued but unpaid interest of $19 million.

As of March 31, 2015 and December 31, 2014, our outstanding debt included in our consolidated balance sheets totaled $3,079 million and $3,084 million, respectively, net of unamortized discounts of $11 million and $13 million, respectively. The following table sets forth the face values of our outstanding debt as of March 31, 2015 and December 31, 2014 (in thousands):

	Rate		Maturity	March 31, 2015			December 31, 2014
Senior secured credit facilities:
Term Loan B	L + 3.00%		February 2019	$	1,735,063		$	1,739,500
Incremental term loan facility	L + 3.50%		February 2019		344,750			345,625
Term Loan C	L + 3.00%		December 2017		49,313			49,313
Revolver, $370 million	L + 2.75%		February 2019		—			—
Revolver, $35 million	L + 3.75%		February 2018		—			—
Senior unsecured notes due 2016		8.35%	March 2016		400,000			400,000
Senior secured notes due 2019		8.50%	May 2019		480,000			480,000
Mortgage facility		5.80%	March 2017		81,863			82,168
Face value of total debt outstanding					3,090,989			3,096,606
Less current portion of debt outstanding					(422,439	)		(22,435	)
Face value of long-term debt outstanding				$	2,668,550		$	3,074,171

Senior Secured Credit Facilities

On February 19, 2013, Sabre GLBL Inc. entered into an agreement that amended and restated its existing senior secured credit facilities (the “Amended and Restated Credit Agreement”). The new agreement replaced (i) the existing initial term loans with new classes of term loans of $1,775 million (the “Term Loan B”) and $425 million (the “Term Loan C”) and (ii) the existing revolver with a new revolver of $352 million (the “Revolver”).

On September 30, 2013, we entered into an agreement for an incremental term loan facility to Term Loan B (the “Incremental Term Loan Facility”), having a face value of $350 million and providing total net proceeds of $350 million. We have used the proceeds of the Incremental Term Loan Facility for working capital, general corporate purposes and strategic actions related to Travelocity. The Incremental Term Loan Facility matures on February 19, 2019 and initially bore interest at a rate equal to the LIBOR rate, subject to a 1.00% floor, plus 3.50% per annum. It includes a provision for increases in interest rates to maintain a difference of not more than 50 basis points relative to future term loan extensions or refinancing of amounts under the Amended and Restated Credit Agreement.

On February 20, 2014, we entered into a series of amendments to our Amended and Restated Credit Agreement (the “Repricing Amendments”) the first of which reduced the Term Loan B’s applicable margin for Eurocurrency and Base rate borrowings to 3.25% and 2.25%, respectively, with a step down to 3.00% and 2.00%, respectively, if the Senior Secured Leverage Ratio (as defined in the Amended and Restated Credit Agreement) is less than or equal to 3.25 to 1.00. It also reduced the Eurocurrency rate floor to 1.00% and the Base rate floor to 2.00%.

The Repricing Amendments extended the maturity date of $317 million of the $352 million Revolver to February 19, 2019. The Repricing Amendments also provided for an incremental revolving commitment due February 19, 2019 of $53 million, increasing the Revolver from $352 million to $405 million. The extended and incremental revolving commitments, totaling $370 million (the “Extended Revolver”), reduced the applicable margins to 3.00% for Eurocurrency and 2.00% for Base rate borrowings, with a step down to 2.75% and 1.75%, respectively, if the Senior Secured Leverage Ratio is less than or equal to 3.25 to 1.00. There were no changes in the maturity date and applicable margins of the unextended revolving commitments of $35 million (“Unextended Revolver”). The Extended Revolver also includes an accelerated maturity date of November 19, 2018 if, as of that date, borrowings under the Term Loan B (or permitted refinancing thereof) remain outstanding and mature before February 18, 2020.

Sabre GLBL Inc.’s obligations under the Amended and Restated Credit Agreement are guaranteed by Sabre Holdings and each of Sabre GLBL Inc.’s wholly-owned material domestic subsidiaries, except unrestricted subsidiaries. We refer to these guarantors together with Sabre GLBL Inc., as the Loan Parties. The Amended and Restated Credit Agreement is secured by (i) a first priority security interest on the equity interests in Sabre GLBL Inc. and each other Loan Party that is a direct subsidiary of Sabre GLBL Inc. or another Loan Party, (ii) 65% of the issued and outstanding voting (and 100% of the non-voting) equity interests of each wholly-owned material foreign subsidiary of Sabre GLBL Inc. that is a direct subsidiary of Sabre GLBL Inc. or another Loan Party, and (iii) a blanket lien on substantially all of the tangible and intangible assets of the Loan Parties.

Under the Amended and Restated Credit Agreement, the Loan Parties are subject to certain customary non-financial covenants, as well as a maximum Senior Secured Leverage Ratio, which applies if our Revolver utilization exceeds certain thresholds and is calculated as Senior Secured Debt (net of cash) to EBITDA, as defined by the agreement. This ratio was 5.0 to 1.0 for 2014 and is 4.5 to 1.0 for 2015. The definition of EBITDA is based on a trailing twelve months EBITDA adjusted for certain items including non-recurring expenses and the pro forma impact of cost saving initiatives. As of March 31, 2015, we are in compliance with all covenants under the Amended and Restated Credit Agreement.

As of March 31, 2015 and December 31, 2014, we had no outstanding balance under the Extended and Unextended Revolver and had outstanding letters of credit totaling $41 million and $47 million, respectively, which reduce our overall credit capacity under the Revolver.

Principal Payments

Term Loan B and the Incremental Term Loan Facility mature on February 19, 2019, and require principal payments in equal quarterly installments of 0.25%. Term Loan C matures on December 31, 2017. As a result of the April 2014 prepayment, quarterly principal payments on Term Loan C are no longer required. We are obligated to pay $17 million on September 30, 2017 and the remaining balance on December 31, 2017. The Extended Revolver matures on February 19, 2019 and the Unextended Revolver matures on February 19, 2018. For the three months ended March 31, 2015, we made $5 million of principal payments on Term Loan B and the Incremental Term Loan Facility. We are scheduled to make $22 million in principal payments over the next twelve months.

We are also required to pay down the term loans by an amount equal to 50% of annual excess cash flow, as defined in our Amended and Restated Credit Agreement. This percentage requirement may decrease or be eliminated if certain leverage ratios are achieved. Based on our results for the year ended December 31, 2014, we are not required to make an excess cash flow payment in 2015. In the event of certain asset sales or borrowings, the Amended and Restated Credit Agreement requires that we pay down the term loans with the resulting proceeds. Subject to the repricing premium discussed above, we may repay the indebtedness at any time prior to the maturity dates without penalty.

Interest

Borrowings under the Amended and Restated Credit Agreement bear interest at a rate equal to either, at our option: (i) the Eurocurrency rate plus an applicable margin for Eurocurrency borrowings as set forth below, or (ii) a base rate determined by the highest of (1) the prime rate of Bank of America, (2) the federal funds effective rate plus 1/2% or (3) LIBOR plus 1.00%, plus an applicable margin for base rate borrowings as set forth below. The Eurocurrency rate is based on LIBOR for all U.S. dollar borrowings and has a floor.

	Eurocurrency borrowings				Base rate borrowings
	Applicable Margin⁽¹⁾		Floor		Applicable Margin		Floor
Term Loan B, prior to Repricing Amendments		4.00%		1.25%		3.00%		2.25%
Term Loan B, subsequent to Repricing Amendments		3.25%		1.00%		2.25%		2.00%
Incremental term loan facility		3.50%		1.00%		2.50%		2.00%
Term Loan C		3.00%		1.00%		2.00%		2.00%
Revolver, $370 million		3.00%	N/A			2.00%	N/A
Revolver, $35 million		3.75%	N/A			2.75%	N/A

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(1)	Applicable margins do not reflect potential step downs which are determined by the Senior Secured Leverage Ratio. See below for additional information.

Applicable margins for Term Loan B and the Extended Revolver step down 25 basis points for any quarter if the Senior Secured Leverage Ratio is less than or equal to 3.25 to 1.00. Applicable margins for all other borrowings under the Amended and Restated Credit Agreement step down by 50 basis points for any quarter if the Senior Secured Leverage Ratio is less than or equal to 3.0 to 1.0. Applicable margins increase to maintain a difference of not more than 50 basis points relative to future term loan extensions or refinancings. In addition, we are required to pay a quarterly commitment fee of 0.375% per annum for unused revolving commitments. The commitment fee may increase to 0.5% per annum if the Senior Secured Leverage Ratio is greater than 4.0 to 1.0.

We have elected the three-month LIBOR as the floating interest rate on all $2,129 million of our outstanding term loans. As of March 31, 2015, the interest rate, including applicable margin, is 4.0% for the Term Loan B of $1,735 million; 4.5% for the Incremental Term Loan Facility of $345 million; and 4.0% for the Term Loan C of $49 million. Interest payments are due on the last day of each quarter. Interest on a portion of the outstanding loan is hedged with interest rate swaps (see Note 5, Derivatives).

As a result of the Repricing Amendments, we incurred costs totaling $3 million which were recorded to interest expense and, in addition, recognized a loss on extinguishment of debt of $3 million for the three months ended March 31, 2014. As of March 31, 2015, we had $23 million of unamortized debt issuance costs included in other assets in our consolidated balance sheets associated with all debt transactions under the Amended and Restated Credit Agreement and the previous senior secured credit agreement. These costs are being amortized to interest expense over the maturity period of the Amended and Restated Credit Agreement. Our effective interest rates for the three months ended March 31, 2015 and 2014, inclusive of amounts charged to interest expense as described above, are as follows:

	Three Months Ended March 31,
	2015			2014
Including the impact of interest rate swaps		4.45	%		6.14	%
Excluding the impact of interest rate swaps		4.45	%		5.50	%

Senior Unsecured Notes

As of March 31, 2015, we have, at face value, $400 million in senior unsecured notes currently bearing interest at a rate of 8.35% and maturing on March 15, 2016 (“2016 Notes”). The 2016 Notes include certain non-financial covenants, including restrictions on incurring certain types of debt, entering into certain sale and leaseback transactions. We issued the 2016 Notes in March 2006 and used all of the net proceeds plus available cash and cash equivalents and marketable securities to prepay $400 million of a bridge facility used to finance the acquisition of lastminute.com. As of March 31, 2015, we are in compliance with all covenants under the indenture for the 2016 Notes.

Senior Secured Notes

As of March 31, 2015, we had, at face value, $480 million in senior secured notes bearing interest at a rate of 8.50% and maturing on May 15, 2019 (“2019 Notes”). In April 2015, we redeemed all of the 2019 Notes through the issuance of the 2023 Notes at the redemption price of 106.375%. We will recognize a loss on extinguishment in the second quarter of 2015 of approximately $32 million, which includes the $31 million redemption premium.

Mortgage Facility

We have $82 million outstanding under a mortgage facility for the buildings, land and furniture and fixtures located at our headquarters facilities in Southlake, Texas. The mortgage facility bears interest at a rate of 5.7985% per annum and matures on April 1, 2017. The mortgage facility includes certain customary non-financial covenants, including restrictions on incurring liens other than permitted liens, dissolving the borrower or changing our business, forgiving debt, changing our principal place of business and transferring the property. As of March 31, 2015, we are in compliance with all covenants under the mortgage facility.