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U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): MARCH 4, 1998
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 1-13647 73-1356520
(STATE OR OTHER JURISDICTION OF (COMMISSION FILE NUMBER) (I.R.S. EMPLOYER
INCORPORATION) IDENTIFICATION NO.)
5330 EAST 31ST STREET, TULSA, OKLAHOMA 74135
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (918) 660-7700
FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT: N/A
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ITEM 5. OTHER EVENTS
On March 4, 1998, the registrant, Dollar Thrifty Automotive Group,
Inc., a Delaware corporation ("Company"), completed the establishment of a $615
million commercial paper facility ("Commercial Paper Facility") which will
provide vehicle fleet financing for the ongoing operations of the Company's
wholly-owned operating subsidiaries, Dollar Rent A Car Systems, Inc., an
Oklahoma corporation ("Dollar"), and Thrifty Rent-A-Car System, Inc., an
Oklahoma corporation ("Thrifty"). The commercial paper will be issued by the
Company's wholly-owned finance subsidiary, Dollar Thrifty Funding Corp., an
Oklahoma corporation ("DTFC"). While DTFC will issue the commercial paper
notes, it will actually use the proceeds to purchase a variable funding note
("VFN") from the Company's other wholly-owned finance subsidiary, Rental Car
Finance Corp. ("RCFC"). RCFC will, in turn, use such proceeds to purchase
vehicles for lease to Dollar and Thrifty.
The commercial paper issued under the Commercial Paper Facility is
supported by collateral for the VFN. The VFN is secured by a grant to a trustee
under an indenture relating to issuance of RCFC asset backed notes (including
the VFN) of a first priority security interest in (i) the Master Motor Vehicle
Lease and Servicing Agreement among RCFC, as lessor, Dollar and Thrifty, as
lessees and servicers, and the Company, as guarantor and master servicer (the
"Lease Agreement"), and payments due thereunder covering certain vehicles that
are not collateral for other outstanding asset backed notes, (ii) a credit
enhancement letter of credit in the initial amount of $5 million (which must be
increased depending upon the amount of commercial paper issued) from Credit
Suisse First Boston which, in addition to providing credit enhancement, also
supports payments due from Dollar and Thrifty under the Lease Agreement, (iii) a
capitalization demand promissory note in the amount of $7.3 million from the
Company to RCFC relating to establishment of the Commercial Paper Facility, (iv)
through a master collateral agency arrangement (the "Master Collateral
Agreement"), vehicles leased under the Lease Agreement and all proceeds from
disposition of such vehicles, and the rights relating to the obligations of
certain approved manufacturers (the "Approved Manufacturers"), pursuant to their
manufacturing programs to repurchase or guarantee minimum resale prices of such
vehicles (the "Manufacturer Programs"), including the receivables due from the
Approved Manufacturers in connection therewith, (v) any cash or investments in
the various accounts held pursuant to the Master Collateral Agreement by a
master collateral agent related to the vehicles, and (vi) any cash or
investments in the various accounts held by the trustee allocable to the VFN.
To support the Commercial Paper Facility, DTFC entered into a secured
364-day revolving liquidity facility (the "Liquidity Facility") provided by a
syndicate of financial institutions (the "Liquidity Banks"). The aggregate
commitments under the Liquidity Facility equal $545 million. The Liquidity
Facility provides the Commercial Paper Facility with a back-up source of
funding if DTFC is unable to refinance maturing commercial paper by issuing new
commercial paper. The Liquidity Facility is secured by the same collateral for
the VFN as described in the paragraph immediately above.
The Company will use $256 million of the proceeds from the Commercial
Paper Facility to refinance the portion of RCFC's outstanding asset backed
notes which begin amortizing from September 1998 through February 1999. The
Company will use the remaining amounts available under the Commercial Paper
Facility for fleet financing and to refinance asset backed notes from time to
time. Commercial paper will be issued at interest rates prevailing in the
market at the time of issuance, or sold at a discount reflecting such rates.
In the event commercial paper cannot be reissued in the market, DTFC will use
proceeds advanced under the Liquidity Facility to repay maturing commercial
paper notes.
The Liquidity Banks will be obligated to fund loans to repay maturing
commercial paper or maturing liquidity loans. Draws under the Liquidity
Facility will be repaid with proceeds from subsequent Liquidity Facility draws
or the issuance of additional commercial paper and payments made by RCFC on the
VFN. Payments on the VFN will be made from collections of lease payments
received from Dollar and Thrifty, payments under the Manufacturer Programs, and
proceeds from the sale of Non-Program Vehicles (as defined below) and other
vehicle sale proceeds.
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At least 80% of vehicles (such vehicles, "Program Vehicles") financed
by RCFC with advances under the VFN will be eligible under Manufacturer
Programs maintained by Approved Manufacturers pursuant to which either (i) in
the case of manufacturer repurchase programs, each manufacturer will be
obligated to repurchase vehicles within designated periods of time, or (ii) in
the case of guaranteed depreciation programs, each manufacturer will reimburse
any difference between the aggregate gross auction sale price of the Program
Vehicles for a particular model year and the aggregate predetermined residual
value of those vehicles, in each case in accordance with certain terms and
conditions as contained in the Manufacturer Program.
Up to 20% of vehicles leased under the Lease Agreement and financed
with proceeds under the VFN will not have the benefit of a Manufacturer Program
(such vehicles, "Non-Program Vehicles"). Typically, Non-Program Vehicles are
purchased at a more favorable price or are specialty vehicles not eligible
under Manufacturer Programs. Additionally, RCFC may purchase Non-Program
Vehicles from Approved Manufacturers which may not offer participation in their
Manufacturer Programs to Dollar and Thrifty. At the conclusion of RCFC's use
of such vehicles, such Non-Program Vehicles will be disposed of in the
secondary vehicle market, principally through third-party vehicle auction
sites, wholesalers or dealers.
The commercial paper notes issued by DTFC were initially rated A-1 by
Standard & Poor's, P-1 by Moody's, and D-1 by Duff & Phelps. DTFC began its
initial sales of commercial paper on March 10, 1998, and has outstanding
approximately $50 million in commercial paper which matures no later than the
maximum term for any commercial paper which can be issued by DTFC, being 58
days.
The descriptions contained herein of the various agreements relating
to the Commercial Paper Facility and Liquidity Facility are qualified in their
entirety by reference to the definitive agreements dated March 4, 1998,
included herewith as Exhibits 4.12 through 4.18. In addition, the Company has
elected to include herewith certain exhibits in connection with the
Registration Statement on Form S-1, File No. 333-39661, filed with the
Securities and Exchange Commission which was declared effective on December 16,
1997. Such exhibits, which are numbered 4.10 and 4.11, relate to the Company's
existing asset backed note program, specifically notes issued by RCFC in
December 1997 in the amount of $900 million, and also include information
relating to credit support furnished by Chrysler Corporation for such issuance
of notes.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
The Exhibits to this report are listed in the Index to
Exhibits set forth elsewhere herein.
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SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC.
Date: March 16, 1998 By: /s/ STEVEN B. HILDEBRAND
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Name: Steven B. Hildebrand
Title: Vice President, Principal Financial
Officer and Principal Accounting
Officer
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INDEX TO EXHIBITS
Exhibit No. Description
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4.10 Amended and Restated Master Collateral Agency Agreement dated as of
December 23, 1997 among the Company, Rental Car Finance Corp.,
Thrifty, Dollar and Bankers Trust Company.
4.11 Chrysler Support Letter of Credit and Reimbursement Agreement dated
as of December 23, 1997 among Chrysler, Dollar, Thrifty, the
Company, TRAC Team, Inc. and DTAG Services, Inc.
4.12 Series 1998-1 Supplement to Base Indenture dated as of March 4,
1998 between Rental Car Finance Corp. and Bankers Trust Company.
4.13 Master Motor Vehicle Lease and Servicing Agreement dated as of
March 4, 1998 among the Company, Dollar, Thrifty and Rental Car
Finance Corp.
4.14 Note Purchase Agreement dated as of March 4, 1998 among Rental Car
Finance Corp., Dollar Thrifty Funding Corp. and Credit Suisse First
Boston.
4.15 Liquidity Agreement dated as of March 4, 1998 among Dollar Thrifty
Funding Corp., certain Financial Institutions and Credit Suisse
First Boston.
4.16 Depositary Agreement dated as of March 4, 1998 between Dollar
Thrifty Funding Corp. and Bankers Trust Company.
4.17 Collateral Agreement dated as of March 4, 1998 among Dollar Thrifty
Funding Corp., Credit Suisse First Boston Corporation and Bankers
Trust Company.
4.18 Dealer Agreement dated as of March 4, 1998 among Dollar Thrifty
Funding Corp., the Company, Credit Suisse First Boston Corporation
and Chase Securities, Inc.
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