The increase wasdue to the cash flow factors listed above and a $2.7 million decrease inthe distributions payable.Funded net debt of $139.8 million increased $19.3 million compared toDecember 31, 2008. First quarter cash flows from operating activitiesbefore changes in non-cash working capital of $11.6 million wereoutweighed by an increase in non-cash working capital of $11.7 million,cash distributions of $17.9 million and capital spending of $1.3 million.The Fund's quarter-end debt-to-equity ratio of 0.70:1 at March 31, 2009increased from last quarter's ratio of 0.59:1 and increased from lastyear's ratio of 0.47:1.At March 31, 2009 the Fund had borrowed $126.0 million and issued $4.7million of letters of credit for a total utilization of $130.7 million ofits $175 million bank credit facility and had utilized $8.9 million ofits $15 million equipment financing facility. Borrowing capacity underthe bank credit facility is dependent on the level of the Fund'sinventories on-hand and outstanding trade accounts receivables. At March31, 2009 borrowing capacity under the bank credit facility wasapproximately equal to the $175 million available at December 31, 2008.The Fund's $175 million bank credit facility along with the $15 milliondemand inventory equipment financing facility should be sufficient tomeet the Fund's short-term normal course working capital, maintenancecapital and growth capital requirements. However, the recent economicdownturn and global financial crisis have resulted in limited creditavailability from traditional sources.
In particular, the Fund hasexperienced an increase in working capital due to potential ordercancellations or deferrals and delays in payment of certain large miningequipment orders as a result of customers experiencing difficulties inobtaining financing. This issue negatively impacted the Fund's quarterend working capital by $27.0 million which included $17.7 million ofreceivables, collected in the second quarter of 2009, and $9.3 million ofmining equipment inventory. Although management currently believes theFund has adequate debt capacity to work through this issue, the Fund mayhave to access the equity or debt markets, or temporarily reducedistributions to accommodate any shortfalls in the Fund's credit facility.In the long-term the Fund may be required to access the equity or debtmarkets in order to fund significant acquisitions and growth relatedworking capital and capital expenditures.During the quarter Wajax was notified that one of its inventory financingproviders decided to exit the wholesale inventory financing business inCanada. They will terminate the provision of inventory financing toMobile Equipment effective December 31, 2009, at which time amounts owingprior to the termination date will be repayable in accordance withrepayment schedules in effect at that time. At March 31, 2009 MobileEquipment had utilized $12.3 million of non-interest bearing inventoryfloor plan financing which the Fund will have to replace. It is currentlyin the process of negotiating with other inventory finance companies toprovide a replacement line on or before December 31, 2009.The Fund sponsors certain defined benefit plans that cover executiveemployees, a small group of inactive employees and a small group ofemployees on long-term disability benefits. The plans' deficit atDecember 31, 2008 excluding the Supplemental Executive Retirement Plan,which is secured by a letter of credit, was $2.0 million.
The definedbenefit plans are subject to actuarial valuations in 2009 and 2010.Management does not expect future cash contribution requirements tochange materially from the current annual contribution level of $0.5million as a result of these valuations and any further declines in thefair value of the defined benefit plans' assets.Financial InstrumentsThe Fund uses derivative financial instruments in the management of itsforeign currency and interest rate exposures. The Fund's policy is not toutilize derivative financial instruments for trading or speculativepurposes. Significant derivative financial instrument transactions andthose outstanding at the end of the quarter were as follows:- The Fund has entered into the following interest rate swaps that haveeffectively fixed the interest rate on $80 million of the Fund's debt atthe combined rate of 2.925%, plus applicable margins, until December 31,2011:-- On June 7, 2008 the delayed interest rate swap the Fund entered intoon May 9, 2007 with two of its lenders became effective. As a result, theinterest rate on the $30 million non-revolving term portion of the bankcredit facility was effectively fixed at 4.60% plus applicable marginsuntil expiry of the facility on December 31, 2011.-- On January 23, 2009, the delayed interest rate swap the Fund enteredinto on December 18, 2008 with two of its lenders became effective.
As aresult, the interest rate on the $50 million revolving term portion ofthe bank credit facility was effectively fixed at 1.92% plus applicablemargins until expiry of the facility on December 31, 2011. -- Margins onthe swaps depend on the Fund's Leverage Ratio and range between 0.75% and2.5%.- The Fund enters into short-term currency forward contracts to fix thecost of certain inbound inventory and to hedge certain foreigncurrency-denominated sales to (receivables from) customers as part of itsnormal course of business. As at March 31, 2009, the Fund had contractsoutstanding to buy U.S.$19.3 million and EUR 0.02 million and to sellU.S.$0.8 million (March 31, 2008 - to buy U.S.$5.7 million and EUR 1.9million). These contracts expire between April 2009 and March 2010, witha weighted average U.S. dollar rate of 1.1953 and a weighted average Eurodollar rate of 1.7065.The Fund measures financial instruments held for trading at fair valuewith subsequent changes in fair value being charged to earnings.Derivatives designated as effective hedges are measured at fair valuewith subsequent changes in fair value being charged to othercomprehensive income. The fair value of derivative instruments isestimated based upon market conditions using appropriate valuationmodels. The carrying values reported in the balance sheet for financialinstruments are not significantly different from their fair values.Currency RiskThere have been no material changes to currency risk since December 31,2008.Contractual ObligationsThere have been no material changes to contractual obligations sinceDecember 31, 2008.Off Balance Sheet FinancingThe Mobile Equipment segment had $56.9 million of consigned inventoryon-hand from a major manufacturer as at March 31, 2009 compared to $52.5million the previous year.
In the normal course of business, Wajaxreceives inventory on consignment from this manufacturer which isgenerally sold to customers or purchased by Wajax. This consignedinventory is not included in the Fund's inventory as the manufacturerretains title to the goods.The Fund's off balance sheet financing arrangements with Wajax Finance (a"private label" financing operation of CIT Financial Ltd.) includeoperating lease contracts in relation to the Fund's long-term lift truckrental fleet in the Mobile Equipment segment. At March 31, 2009, thenon-discounted operating lease commitment for the rental fleet was $13.9million (March 31, 2008 - $11.6 million).In the event the inventory consignment program was terminated, the Fundwould utilize interest free financing, if any, made available by themanufacturer and/or utilize capacity under its bank credit facility. Inthe event the rental fleet program with Wajax Finance was terminated, theFund would source alternative lenders to replicate the off balance sheetrental fleet program and/or utilize capacity under its credit facility tofinance future additions to the rental fleet. Although managementcurrently believes the Fund has adequate debt capacity, the Fund wouldhave to access the equity or debt markets, or temporarily reducedistributions to accommodate any shortfalls in the Fund's creditfacility.