(10)Debt

Details of the Company’s debt as of December 31, 2017 and 2016 were as follows (dollars in thousands):



		December 31, 2017					December 31, 2016
		Outstanding				Average	Outstanding				Average
Reference		Current		Long-term		Interest	Current		Long-term		Interest	Maturity
(a)(i)	Revolving credit facility	$	-	$	528,000	3.2%	$	-	$	526,000	2.5%	March 2020
(a)(ii)	Revolving credit facility - Rail		-		272,000	3.2%		-		223,500	2.4%	October 2020
(a)(iii)	Revolving credit facility - Euro		-		14,736	2.0%		-		-	0.0%	September 2020
(b)(i)	Term loan		21,900		-	3.4%		1,800		21,900	2.9%	April 2018
(b)(ii)	Term loan		9,000		111,750	3.1%		9,000		120,750	2.3%	October 2019
(b)(iii)	Term loan		7,000		82,500	3.3%		7,000		89,500	2.5%	June 2021
(b)(iv)	Term loan		1,198		16,524	3.4%		1,158		17,723	3.4%	December 2020
(b)(v)	Term loan		2,805		43,560	3.6%		2,705		46,365	3.6%	August 2021
(c)	Senior secured notes		6,110		58,885	4.9%		6,110		64,995	4.9%	September 2022
(d)	Asset-backed notes		65,307		377,984	3.5%		40,000		202,875	3.4%	June 2042
(e)	Collateralized financing obligations		22,549		69,441	1.2%		28,693		71,346	1.1%	December 2020
(f)	Term loans held by VIE		-		3,286	2.7%		2,287		3,541	2.5%	June 2019
			135,869		1,578,666			98,753		1,388,495
	Debt issuance costs		(3,820)		(7,893)			(3,226)		(7,996)
	Total Debt	$	132,049	$	1,570,773		$	95,527	$	1,380,499

(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 June 16, 2017, 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 increase the commitment level from $775.0 million to $960.0 million.

As of December 31, 2017, the maximum commitment under the revolving credit facility was $960.0 million. 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 $25.0 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 $30.0 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, 2017, the Company was in compliance with the terms of the revolving credit facility.

As of December 31, 2017, the Company had $431.9 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, 2017, the borrowing availability under the revolving credit facility was $95.8 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 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 $749.7 million as of December 31, 2017, 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 revolving credit facility for CAI Rail 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, 2017, 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, 2017, CAI Rail had $228.0 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, 2017, the borrowing availability under the revolving credit facility was $2.7 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, 2017, 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 $343.4 million as of December 31, 2017, and is guaranteed by the Company.

(iii) On September 23, 2016, the Company and CAI International GmbH (CAI GmbH), a wholly-owned subsidiary of the Company, entered into a Revolving Credit Agreement with a financial institution to finance the acquisition of rental equipment. As of December 31, 2017, the maximum credit commitment under the revolving credit facility was €25.0 million. Borrowings under this revolving credit facility bear interest at a variable rate. Interest rates are based on EURIBOR.

As of December 31, 2017, CAI GmbH had €12.7 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, 2017, the borrowing availability under the revolving credit facility was €1.4 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 GmbH’s revolving credit facility containers various financial and other covenants. As of December 31, 2017, CAI GmbH was in compliance with the terms of the revolving credit facility. CAI GmbH’s revolving credit facility, including any amounts drawn on the facility, is secured by all of the assets of CAI GmbH, which had a net book value of €18.3 million as of December 31, 2017, 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, 2017, the loan had a balance of $21.9 million.

The following are the estimated future principal and interest payments under these loans as of December 31, 2017 (in thousands). The payments were calculated assuming the interest rate remains 3.4% through maturity of the loan.

(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 (CAL II) (see Note 10 (d) 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, 2017, the term loan had a balance of $120.8 million.

The following are the estimated future principal and interest payments under this loan as of December 31, 2017 (in thousands). The payments were calculated assuming the interest rate remains 3.1% through maturity of the loan.



2018	$	12,690
2019		114,436
		127,126
Less: Amount representing interest		(6,376)
Term loan	$	120,750

(iii) On April 11, 2012, the Company entered into a term loan agreement with a consortium of banks. The agreement, as amended, provided 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.

On June 30, 2016, the Company entered into an amended and restated term loan agreement, 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) provide the Company with the ability to increase the commitments under the facility to a maximum of $100.0 million, subject to certain conditions, (2) extend the maturity date to June 30, 2021, and (c) revise certain of the covenants and restrictions under the prior agreement to provide the Company with additional flexibility. The term loan’s outstanding principal is amortized quarterly, with quarterly payments equal to 1.75% multiplied by the original outstanding principal. The amended and restated term loan agreement bears a variable interest rate based on LIBOR for Eurodollar loans, and Base Rate for base rate loans. As of December 31, 2017, the loan had a balance of $89.5 million.



2018	$	9,923
2019		9,687
2020		9,459
2021		69,628
		98,697
Less: Amount representing interest		(9,197)
Term loan	$	89,500

(iv) On December 22, 2015, the Company entered into a $20.0 million five-year term loan agreement for CAI Rail with a financial institution. 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, 2017, the loan had a balance of $17.7 million.

The following are the estimated future principal and interest payments under this loan as of December 31, 2017 (in thousands). The payments were calculated based on the fixed interest rate of 3.4%.


2018	$	1,793
2019		1,793
2020		15,793
		19,379
Less: Amount representing interest		(1,657)
Term loan	$	17,722

(v) On August 30, 2016, CAI Rail entered into a term loan agreement of up to $100.0 million with a consortium of banks for the acquisition of railcars, subject to certain borrowing conditions, which is secured by certain railcars and other assets of CAI Rail. The loan agreement is an amortizing facility with a term of five years. Borrowings under the loan bear interest at a fixed rate as specified in the applicable term note entered into at the time a draw is made under the loan agreement. Principal and interest on the borrowings are payable monthly during the five-year term of the note. At closing of the loan agreement, CAI Rail made a draw of $50.0 million on the facility at a fixed interest rate of 3.6% per annum. Any unpaid principal and interest is due on August 30, 2021. As of December 31, 2017, the loan had a balance of $46.4 million.

The following are the estimated future principal and interest payments under this loan as of December 31, 2017 (in thousands). The payments were calculated based on the fixed interest rate of 3.6%.



2018	$	4,441
2019		4,441
2020		4,441
2021		38,524
		51,847
Less: Amount representing interest		(5,482)
Term loan	$	46,365

The Company's term loans are secured by rental equipment owned by the Company, which had a net book value of $356.0 million as of December 31, 2017.

(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, 2017, the Notes had a balance of $65.0 million.

The following are the estimated future principal and interest payments under the Notes as of December 31, 2017 (in thousands). The payments were calculated based on the fixed interest rate of 4.9%.



2018	$	9,220
2019		8,920
2020		8,621
2021		8,322
2022		42,467
		77,550
Less: Amount representing interest		(12,555)
Senior secured notes	$	64,995

The Company's senior secured notes are secured by rental equipment owned by the Company, which had a net book value of $85.2 million as of December 31, 2017.

(d)Asset-Backed Notes

On October 18, 2012, CAL II 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, 2017, the Series 2012-1 Asset-Backed Notes had a balance of $82.7 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 10 (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 $120.2 million as of December 31, 2017.

On July 6, 2017, CAL Funding III Limited (CAL Funding III), a wholly-owned indirect subsidiary of CAI, issued $240.9 million of 3.6% Class A fixed rate asset-backed notes and $12.2 million of 4.6% Class B fixed rate asset-backed notes (collectively, the Series 2017-01 Asset-Backed Notes). Principal and interest on the Series 2017-01 Asset-Backed Notes is payable monthly commencing on July 25, 2017, with the Series 2017-01 Asset-Backed Notes maturing in June 2042. The proceeds from the Series 2017-01 Asset-Backed Notes were used for general corporate purposes, including repayment of debt by the Company. As of December 31, 2017, the Series 2017-01 Asset-Backed Notes had a balance of $240.4 million.

The following are the estimated future principal and interest payments under the Asset-Backed Notes as of December 31, 2017 (in thousands). The payments were calculated based on the weighted average fixed interest rate of 3.5%.



2018	$	79,862
2019		77,585
2020		75,309
2021		73,032
2022		67,910
2023 and thereafter		129,086
		502,784
Less: Amount representing interest		(59,493)
Asset-backed notes	$	443,291

The Company's asset-backed notes are secured by rental equipment owned by the Company, which had a net book value of $566.1 million as of December 31, 2017.

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, 2017, the restricted cash account had a balance of $11.8 million.

(e)Collateralized Financing Obligations

As of December 31, 2017, the Company had collateralized financing obligations of $92.0 million (see Note 4). The obligations had an average interest rate of 1.2% as of December 31, 2017 with maturity dates between March 2018 and December 2020. 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, 2017 (in thousands). The payments were calculated assuming an average interest rate of 1.2% through maturity of the obligations.



2018	$	22,978
2019		40,840
2020		22,086
2021		8,120
		94,024
Less: Amount representing interest		(2,034)
Collateralized financing obligations	$	91,990

(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 4) 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, 2017, the term loans held by the Japanese investor fund totaled $3.3 million and had an average interest rate of 2.7%.



2018	$	-
2019		3,380
		3,380
Less: Amount representing interest		(94)
Term loans held by VIE	$	3,286

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 $9.6 million as of December 31, 2017.

The agreements relating to all of the Company’s debt contain various financial and other covenants. As of December 31, 2017, the Company was in compliance with all of its debt covenants.

Less: Amount representing interest