American Railcar subsidiary gets $100 million loan as bridge financing

By Susanna Moon

Chicago, Oct. 22 – American Railcar Industries, Inc. obtained bridge financing in the form of a $100 million secured term loan to support and grow its leasing business and for general corporate purposes, according to an 8-K filing with the Securities and Exchange Commission.

The company is exploring long-term, asset-based financing alternatives, which may include the sale of notes in a private offering.

On Oct. 16 the company and its newly formed wholly owned subsidiary Longtrain Leasing II, LLC entered into a contribution and sale agreement. The company transferred certain assets to Longtrain II, partially as a sale for cash consideration of $100 million and partially as a capital contribution to Longtrain II.

At closing, Longtrain II entered into an agreement with Credit Suisse AG, New York Branch as agent for the $100 million secured term loan and drew the entire amount to pay the cash purchase price under the contribution and sale agreement.

Interest on the loans is Libor plus 145 basis points, stepping up in six months to Libor plus 295 bps.

The principal of the loan matures April 16, 2015.

The loans may be prepaid at Longtrain II’s option at any time without premium or penalty.

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

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