page 72 Bombardier Inc. Annual Report 2003-04 Credit support 2004). Also, a rating downgrade below invest- ment grade by either Moody’s Investor Services Inc. or Standard & Poor’s could result in the wind-down of $125 million US ($166 mil- lion) of Bombardier securitiza-tion conduits ($72 million outstanding as at January 31, 2004). As of March 17, 2004, the following invest- ment grade ratings applied to the long-term debt of the Corporation: The indentures governing BC’s long-term debt and credit facilities provide for substantially similar covenant and “keepwell” packages from the Corporation. Bombardier Inc.’s keep- well agreements provide for minimum ownership of 51% in BC and for the injection of equity in the event that certain minimum net worth levels are not met or if a fixed charge coverage ratio falls below 1.2. Finally, these indentures provide for the undertaking of Bombardier Inc. to maintain the existing cross- default provision in the indenture governing the Corporation’s $150-million debentures due in 2026, as well as to provide for similar cross-default provisions in all of its future  public debt.  Certain of the Corporation’s financial commit- ments include provisions that could become effective in the event of a rating downgrade of the Corporation. Credit events A rating downgrade below investment  grade could result in the reimbursement of customer advances amounting to $170 million in the aerospace segment. In addition, the Corporation may be required to repurchase at fair value of $26 million US ($34 million) as at January 31, 2004, the call options related to the Putable/Callable notes due in 2013, should the call holder elect early termination. The Putable/Callable notes amounting to $300 mil- lion US ($398 million) would become repayable at the next coupon reset date (May 31, 2004), immediately following such a downgrade. Furthermore, BC has entered into an interest- rate swap agreement whereby the counterparty has an optional early termination right in the event of a rating downgrade below investment grade of the Corporation by either Moody’s Investor Services Inc. or Standard & Poor’s.The estimated settlement value as at January 31, 2004 is not significant. A rating downgrade by Dominion Bond Rating Services Ltd. could result in the wind-down  of $200 million of a BC securitization conduit ($80 million outstanding as at January 31, In January 2004, Bombardier renewed its third-party U.S. and U.K. facilities for the secu- ritization of trade receivables generated in the normal course of business. The U.S. facility was renewed at $125 million US (down from $200 million US as at January 31, 2003) and The Corporation provides administrative services to special-purpose entities (SPEs)  In the aerospace segment, Bombardier has entered into various agreements with third parties, through which it sells rights under  certain manufacturing contracts on an ongoing basis. The amount of the rights sold totalled  $170 million as at January 31, 2004, compared to $369 million as at January 31, 2003. These are accounted for as advances received and deducted from inventories or presented as advances in excess of related costs. In con- nection with these sales, the Corporation has provided recourse to one purchaser amounting to $17 million as at January 31, 2004. The Corporation’s maximum exposure under  this recourse is included in note 24 to the Consolidated Financial Statements. Revenues and related profits on sales of aircraft are  recognized on delivery and the sale of rights does not result in the acceleration of revenue or profit recognition. The Corporation leases certain of its buildings and equipment from others, and assumes operating lease obligations in connection with the sale of new aircraft. The Corporation finances freight cars, used aircraft and trans- portation equipment through sale and leaseback structures. The Corporation’s undis- counted minimum lease payments under such leases amounted to $1.5 billion for operating leases and $1.6 billion for sale and leaseback transactions as at January 31, 2004. These commitments are disclosed in note 24 to the Consolidated Financial Statements. In the normal course of business, the  Corporation finances certain activities through off-balance sheet transactions, consisting  of leases, securitizations and others arrange- ments. the U.K. facility was renewed at £50 million, the same level as last year. The U.S. facility provides for a 364-day purchase commitment for trade receivables originating from North American manufacturing operations, while the U.K. facility is an uncommitted facility to pur- chase trade receivables from U.K.-based Bombardier Transportation operations. These securitization activities replaced Bombardier receivable factoring activities historically carried out through BC. The Corporation received pro- ceeds of $905 million and $477 million on the sale of trade receivables for the U.S. and U.K. facilities respectively during fiscal year 2004. The amounts sold and outstanding with respect to the U.S. and U.K. facilities were $118 million as at January 31, 2004 and $169 million as at January 31, 2003. In addition, in December 2003, Bombardier entered into a € 100-million ($165-million) four-year factoring arrangement with a third party, ($60 million outstanding as at January 31, 2004) for cer- tain receivables originating from Bombardier Transportation’s German operations. RATING AGENCY RATING Moody’s Investor Services Inc. Baa3 Standard & Poor’s BBB- Fitch Ratings BBB- Dominion Bond Rating Service Limited BBB Financial arrangements  Off-balance sheet arrangements c) Other arrangements a) Leases b) Securitizations  Bombardier