American Railcar restates credit facility for $318.7 million term loan

By Marisa Wong

Madison, Wis., Jan. 15 - American Railcar Industries, Inc. and its wholly owned subsidiary, Longtrain Leasing I, LLC, entered into an amended and restated credit agreement on Wednesday with Key Equipment Finance, a division of KeyBank NA, as administrative agent, according to an 8-K filing with the Securities and Exchange Commission.

The amended and restated credit agreement provides Longtrain with a senior secured term loan facility of $318,681,698.55. The credit agreement contains an incremental borrowing provision that allows Longtrain, within the 90-day period ending on Oct. 15, 2014, to increase the amount of the facility by a total of up to $100 million.

The amount of the term loans is not to exceed the lesser of $418,681,698.55 and 80% of the net aggregate equipment value, which is based on the value of eligible railcars subject to eligible leases and is subject to adjustments and concentration limits specified in the credit agreement.

The amended credit agreement restates a credit agreement dated Dec. 20, 2012 with Fifth Third Bank as initial administrative agent and Key Equipment Finance as successor administrative agent.

Proceeds of the term loans may be used to finance the manufacturing of new railcars, to finance existing railcars and to refinance term loans under the 2012 credit agreement.

At closing the initial term loan totaled about $316 million, net of fees and expenses. Of this amount, roughly $194 million was used to refinance the 2012 credit agreement.

The term loans accrue interest at one-month Libor plus 200 basis points. The interest rate increases by 200 bps following specified defaults.

The loans may be prepaid at any time without premium or penalty. Beginning on Feb. 15, the term loans will amortize in monthly installments as follows: for the first four years, in an aggregate annual amount equal to 3.33%; for the fifth year, in an aggregate annual amount equal to 4.3%; and for the sixth year, in an aggregate annual amount equal to 5.3%, with any remaining balance payable at maturity on Jan. 15, 2020.

Longtrain is required to make additional mandatory payments to cure a borrowing base deficit, with cash proceeds from issuances of debt and equity and with cash proceeds of asset sales. An early amortization event occurs upon a borrowing base deficit lasting five days, Longtrain's debt service coverage ratio falling below 1.2 times, a manager termination event or any event of default.

In addition, the facility contains a number of covenants, including one requiring Longtrain to comply with a debt service coverage ratio of 1.05 times, measured quarterly on a nine-month trailing basis and subject to an up to 75- to 135-day cure period.

American Railcar is a St. Charles, Mo., manufacturer of railroad cars.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.