(9)Debt and Capital Lease Obligations

Debt

Details of the Company’s debt as of December 31, 2015 and 2014 were as follows (dollars in thousands):



		December 31, 2015					December 31, 2014
		Outstanding				Average	Outstanding				Average	Agreement
Reference		Current		Long-term		Interest	Current		Long-term		Interest	Terminates
(a)(i)	Revolving credit facility	$	8,500	$	488,000	1.8%	$	-	$	289,000	1.9%	March 2020
(a)(ii)	Revolving credit facility - Rail		34,500		126,000	1.9%		-		61,769	1.9%	October 2020
(b)(i)	Term loan		1,800		23,700	2.3%		1,800		25,500	2.2%	April 2018
(b)(ii)	Term loan		9,000		129,750	2.2%		9,000		138,750	1.8%	October 2019
(b)(iii)	Term loan		9,940		99,440	1.9%		9,940		109,380	1.9%	April 2017
(b)(iv)	Term loan		1,119		18,881	3.4%		-		-	-	December 2020
(c)	Senior secured notes		7,175		71,105	4.9%		8,240		78,280	4.9%	September 2022
(d)	Asset backed notes		40,000		242,875	3.4%		40,000		282,875	3.4%	March 2028
(e)	Collateralized financing obligations		58,553		53,697	0.7%		57,390		65,184	0.8%	June 2019
(f)	Term loans held by VIE		1,829		5,748	2.6%		1,829		8,016	2.6%	June 2019
(g)	Short-term line of credit		-		-	-		75,000		-	1.5%	May 2016
	Total Debt	$	172,416	$	1,259,196		$	203,199	$	1,058,754

(a)Revolving Credit Facilities

Revolving credit facilities consist of the following:

(i) On March 15, 2013, the Company entered into a Third Amended and Restated Revolving Credit Agreement, as amended, with a consortium of banks to finance the acquisition of container rental equipment and for general working capital purposes. On January 30, 2015, the Company entered into an amendment to the Third Amended and Restated Revolving Credit Agreement, pursuant to which the revolving credit facility was amended to extend the maturity date to March 15, 2020, reduce the interest rate, increase the commitment level from $760.0 million to $775.0 million, and revise certain of the covenants and restrictions to provide the Company with additional flexibility.

As of December 31, 2015, the maximum commitment under the revolving credit facility was $775.0 million. The revolving credit facility may be increased up to a maximum of $960.0 million, in accordance with the terms of the agreement, so long as no default of event of default exists either before or immediately after giving effect to the increase. There is a commitment fee on the unused amount of the total commitment, payable quarterly in arrears. The revolving credit facility provides that swing line loans (short-term borrowings of up to $10.0 million in the aggregate that are payable within 10 business days or at maturity date, whichever comes earlier) and standby letters of credit (up to $15.0 million in the aggregate) will be available to the Company. These credit commitments are part of, and not in addition to, the total commitment provided under the revolving credit facility. The interest rates vary depending upon whether the loans are characterized as Base Rate loans or Eurodollar rate loans, as defined in the revolving credit agreement. Interest rates are based on LIBOR for Eurodollar loans, and Base Rate for Based Rate loans. In addition to various financial and other covenants, the Company’s revolving credit facility also includes certain restrictions on the Company’s ability to incur other indebtedness or pay dividends to stockholders. As of December 31, 2015, the Company was in compliance with the terms of the revolving credit facility.

As of December 31, 2015, the Company had $278.4 million in availability under the revolving credit facility (net of $0.1 million in letters of credit) subject to its ability to meet the collateral requirements under the agreement governing the facility. Based on the borrowing base and collateral requirements at December 31, 2015, the borrowing availability under the revolving credit facility was $93.1 million, assuming no additional contribution of assets. The entire amount of the facility drawn at any time plus accrued interest and fees is callable on demand in the event of certain specified events of default.

The Company’s revolving credit facility, including any amounts drawn on the facility, is secured by substantially all of the assets of the Company (not otherwise used as security for its other credit facilities) including containers owned by the Company, which had a net book value of $717.0 million as of December 31, 2015, the underlying leases and the Company’s interest in any money received under such contracts.

(ii) On October 22, 2015, the Company and CAI Rail Inc. (CAI Rail), a wholly-owned subsidiary of the Company, entered into the Second Amended and Restated Revolving Credit Agreement with a consortium of banks, pursuant to which the prior revolving credit facility was amended to extend the maturity date to October 22, 2020, reduce the interest rate, increase the commitment level from $250.0 million to $500.0 million, which may be increased up to a maximum of $700.0 million subject to certain conditions, and revise certain of the covenants and restrictions under the prior facility to provide the Company with additional flexibility. As of December 31, 2015, the maximum credit commitment under the revolving line of credit was $500.0 million.

Borrowings under this revolving credit facility bear interest at a variable rate. The interest rates vary depending upon whether the loans are characterized as Base Rate loans or Eurodollar rate loans, as defined in the revolving credit agreement. Interest rates are based on LIBOR for Eurodollar loans, and Base Rate for Base Rate loans.

As of December 31, 2015, CAI Rail had $339.5 million in availability under the revolving credit facility, subject to its ability to meet the collateral requirements under the agreement governing the facility. Based on the borrowing base and collateral requirements at December 31, 2015, the borrowing availability under the revolving credit facility was $6.8 million, assuming no additional contribution of assets. The entire amount of the facility drawn at any time plus accrued interest and fees is callable on demand in the event of certain specified events of default.

The agreement governing CAI Rail’s revolving credit facility contains various financial and other covenants. As of December 31, 2015, CAI Rail was in compliance with the terms of the revolving credit facility. CAI Rail’s revolving credit facility, including any amounts drawn on the facility, is secured by all of the assets of CAI Rail, which had a net book value of $209.1 million as of December 31, 2015, and is guaranteed by the Company.

(b)Term Loans

Term loans consist of the following:

(i) On March 22, 2013, the Company entered into a $30.0 million five-year term loan agreement with Development Bank of Japan (DBJ). The loan is payable in 19 quarterly installments of $0.5 million starting July 31, 2013 and a final payment of $21.5 million on April 30, 2018. The loan bears interest at variable rates based on LIBOR. As of December 31, 2015, the loan had a balance of $25.5 million.

The following are the estimated future principal and interest payments under these loans as of December 31, 2015 (in thousands). The payments were calculated assuming the interest rate remains 2.3% through maturity of the loan.



2016	$	2,386
2017		2,342
2018		22,153
		26,881
Less: Amount representing interest		(1,381)
Term loan	$	25,500

(ii) On December 20, 2010, the Company entered into a term loan agreement with a consortium of banks. Under this loan agreement, the Company was eligible to borrow up to $300.0 million, subject to certain borrowing conditions, which amount is secured by certain assets of the Company’s wholly-owned foreign subsidiaries. The loan agreement is an amortizing facility with a term of six years. The interest rates vary depending upon whether the loans are characterized as Base Rate loans or Eurodollar rate loans, as defined in the term loan agreement. The loan bears a variable interest rate based on LIBOR for Eurodollar loans, and Base Rate for Base Rate loans.

On March 28, 2013, the term loan was amended which reduced the principal balance of the loan from $249.4 million to $125.0 million through payment of $124.4 million from the proceeds of the $229.0 million fixed-rate asset-backed notes issued by the Company’s indirect wholly-owned subsidiary, CAL Funding II Limited (see paragraph (d) Asset-Backed Notes below).

On October 1, 2014, the Company entered into an amended and restated term loan agreement with a consortium of banks, pursuant to which the prior loan agreement was refinanced. The amended and restated term loan agreement, which contains similar terms to the prior loan agreement, was amended to, among other things: (a) reduce the borrowing rates from LIBOR plus 2.25% to LIBOR plus 1.6% (per annum) for Eurodollar loans, (b) increase the loan commitment from $115.0 million to $150.0 million, (c) extend the maturity date to October 1, 2019, and (d) revise certain of the covenants and restrictions under the prior loan agreement to provide the Company with additional flexibility. As of December 31, 2015, the term loan had a balance of $138.8 million.

The following are the estimated future principal and interest payments under this loan as of December 31, 2015 (in thousands). The payments were calculated assuming the interest rate remains 2.2% through maturity of the loan.



2016	$	11,986
2017		11,780
2018		11,582
2019		113,629
		148,977
Less: Amount representing interest		(10,227)
Term loan	$	138,750

(iii) On April 11, 2012, the Company entered into a term loan agreement with a consortium of banks. The agreement, as amended, provides for a five-year term loan of up to $142.0 million, subject to certain borrowing conditions, which amount is secured by certain assets of the Company. The commitment under the loan may be increased to a maximum of $200.0 million under certain conditions described in the agreement. The term loan’s outstanding principal bears interest based on LIBOR and is amortized quarterly, with quarterly payments equal to 1.75% multiplied by the outstanding principal amount at such time. The facility contains various financial and other covenants. The full $142.0 million has been drawn and was primarily used to repay outstanding amounts under the Company’s senior revolving credit facility. All unpaid amounts then outstanding are due and payable on April 11, 2017. As of December 31, 2015, the loan had a balance of $109.4 million.



2016	$	12,029
2017		100,405
		112,434
Less: Amount representing interest		(3,054)
Term loan	$	109,380

(iv) On December 22, 2015, the Company and CAI Rail entered into a $20.0 million five-year term loan agreement with Siemens Financial Services, Inc. (Siemens). The term loan’s outstanding principal bears interest at a fixed rate of 3.4% per annum and is amortized quarterly. Any unpaid principal and interest is due and payable on December 22, 2020. The proceeds from the term loan were primarily used to repay outstanding amounts under CAI Rail’s revolving credit facility. As of December 31, 2015, the loan had a balance of $20.0 million.

The following are the estimated future principal and interest payments under this loan as of December 31, 2015 (in thousands). The payments were calculated based on the fixed interest rate of 3.4%.


2016	$	1,793
2017		1,793
2018		1,793
2019		1,793
2020		15,793
		22,965
Less: Amount representing interest		(2,965)
Term loan	$	20,000

The Company's term loans are secured by rental equipment owned by the Company, which had a net book value of $356.7 million as of December 31, 2015.

(c)Senior Secured Notes

On September 13, 2012, Container Applications Limited (CAL), a wholly-owned subsidiary of the Company, entered into a Note Purchase Agreement with certain institutional investors, pursuant to which CAL issued $103.0 million of its 4.90% Senior Secured Notes due September 13, 2022 (the Notes) to the investors. The Notes are guaranteed by the Company and secured by certain assets of CAL and the Company.

The Notes bear interest at 4.9% per annum, due and payable semiannually on March 13 and September 13 of each year, commencing on March 13, 2013. In addition, CAL is required to make certain principal payments on March 13 and September 13 of each year, commencing on March 13, 2013. Any unpaid principal and interest is due and payable on September 13, 2022. The Note Purchase Agreement provides that CAL may prepay at any time all or any part of the Notes in an amount not less than 10% of the aggregate principal amount of the Notes then outstanding. As of December 31, 2015, the Notes had a balance of $78.3 million.

The following are the estimated future principal and interest payments under the Notes as of December 31, 2015 (in thousands). The payments were calculated based on the fixed interest rate of 4.9%.



2016	$	10,910
2017		9,520
2018		9,220
2019		8,920
2020		8,621
2021 and thereafter		50,789
		97,980
Less: Amount representing interest		(19,700)
Senior secured notes	$	78,280

The Company's senior secured notes are secured by rental equipment owned by the Company, which had a net book value of $101.5 million as of December 31, 2015.

(d)Asset-Backed Notes

On October 18, 2012, CAL Funding II Limited (CAL II), a wholly-owned indirect subsidiary of CAI, issued $171.0 million of 3.47% fixed rate asset-backed notes (Series 2012-1 Asset-Backed Notes). Principal and interest on the Series 2012-1 Asset-Backed Notes is payable monthly commencing on November 26, 2012, and the Series 2012-1 Asset-Backed Notes mature in October 2027. The proceeds from the Series 2012-1 Asset-Backed Notes were used to repay part of the Company’s borrowings under its senior revolving credit facility. As of December 31, 2015, the Series 2012-1 Asset-Backed Notes had a balance of $116.9 million.

On March 28, 2013, CAL II issued $229.0 million of 3.35% fixed rate asset-backed notes (Series 2013-1 Asset-Backed Notes). Principal and interest on the Series 2013-1 Asset-Backed Notes is payable monthly commencing on April 25, 2013, and the Series 2013-1 Asset-Backed Notes mature in March 2028. The proceeds from the Series 2013-1 Asset-Backed Notes were used partly to reduce the balance of the Company’s term loan as described in Note 9 (b)(ii) above, and to partially pay down the Company’s senior revolving credit facility. The Series 2013-1 Asset-Backed Notes had a balance of $166.0 million as of December 31, 2015.

The following are the estimated future principal and interest payments under the Asset-Backed Notes as of December 31, 2015 (in thousands). The payments were calculated based on the weighted average fixed interest rate of 3.4%.



2016	$	48,993
2017		47,632
2018		46,272
2019		44,911
2020		43,551
2021 and thereafter		85,931
		317,290
Less: Amount representing interest		(34,415)
Asset-backed notes	$	282,875

The Company's asset-backed notes are secured by rental equipment owned by the Company, which had a net book value of $356.4 million as of December 31, 2015.

The agreements under each of the asset-backed notes described above require the Company to maintain a restricted cash account to cover payment of the obligations. As of December 31, 2015, the restricted cash account had a balance of $7.2 million.

(e)Collateralized Financing Obligations

As of December 31, 2015, the Company had collateralized financing obligations of $112.2 million (see Note 3). The obligations had an average interest rate of 0.7% as of December 31, 2015 with maturity dates between March 2016 and June 2019. The debt is secured by a pool of containers covered under the financing arrangements.

The following are the estimated future principal and interest payments under the Company’s collateralized financing obligations as of December 31, 2015 (in thousands). The payments were calculated assuming an average interest rate of 0.7% through maturity of the obligations.



2016	$	59,988
2017		18,510
2018		25,708
2019		10,820
		115,026
Less: Amount representing interest		(2,776)
Collateralized financing obligations	$	112,250

(f)Term Loans Held by VIE

On June 25, 2014, one of the Japanese investor funds that is consolidated by the Company as a VIE (see Note 3) entered into a term loan agreement with a bank. Under the terms of the agreement, the Japanese investor fund entered into two loans; a five year, amortizing loan of $9.2 million at a fixed interest rate of 2.7%, and a five year, non-amortizing loan of $1.6 million at a variable interest rate based on LIBOR. The debt is secured by assets of the Japanese investor fund, and is subject to certain borrowing conditions set out in the loan agreement. As of December 31, 2015, the term loans held by the Japanese investor fund totaled $7.6 million and had an average interest rate of 2.6%.



2016	$	2,004
2017		1,956
2018		1,908
2019		2,132
		8,000
Less: Amount representing interest		(423)
Term loans held by VIE	$	7,577

The Company's term loans held by VIE are secured by rental equipment owned by the Japanese investor fund, which had a net book value of $16.4 million as of December 31, 2015.

(g)Short Term Line of Credit

On May 8, 2014, CAL entered into a short term uncommitted line of credit agreement. Under this credit agreement, CAL is eligible to borrow up to $75.0 million, subject to certain borrowing conditions. Loans made under the line of credit are repayable on the earlier of (a) 3 months after the loan is made, and (b) the facility termination date of May 8, 2016. Outstanding loans bear a variable interest rate based on LIBOR. The full $75.0 million was drawn and was primarily used to repay outstanding amounts under the Company’s senior revolving credit facility. As of December 31, 2015, the full $75.0 million was paid down.

The agreements relating to all of the Company’s debt contain various financial and other covenants. As of December 31, 2015, the Company was in compliance with all of its debt covenants.

Capital Lease Obligations

As of December 31, 2015, the Company had capital lease obligations of less than $0.1 million. The underlying obligations are denominated in Euros at floating interest rates averaging 2.8% as of December 31, 2015 with maturity dates of March 2016. The loans are secured by certain containers owned by the Company, which had a net book value of $1.2 million as of December 31, 2015.

The following are the estimated future principal and interest payments under capital lease obligations as of December 31, 2015 (in thousands). The payments were calculated assuming the interest rate remains 2.8% through maturity of the loans.

Less: Amount representing interest

Capital lease obligations