Debt

Debt consisted of the following (amounts in thousands):



	December 31, 2017			December 31, 2016
Institutional notes	$	2,381,000		$	2,233,874
Asset-backed securitization term notes	2,378,470			1,384,235
Term loan facilities	1,701,998			1,332,030
Asset-backed warehouse facilities	110,000			660,000
Revolving credit facilities	305,000			708,750
Capital lease obligations	103,409			96,775
Total debt outstanding	6,979,877			6,415,664
Debt costs	(40,636		)	(19,999		)
Unamortized fair value debt adjustment	(27,516		)	(42,216		)
Debt, net of unamortized debt costs	$	6,911,725		$	6,353,449

The Company is subject to certain financial covenants under its debt agreements. The agreements remain the obligations of the respective subsidiaries, and all related debt covenants are calculated at the subsidiary level. As of December 31, 2017 and 2016, the Company was in compliance with all financial covenants in accordance with the terms of its debt agreements.

The Company recognized $7.0 million, $0.1 million, and $1.2 million of write-off of debt costs for the years ended December 31, 2017, 2016 and 2015, respectively, related to either a termination or modification of a debt arrangement.

Note 6—Debt (continued)

As of December 31, 2017, the Company had $4,277.5 million of total debt outstanding on facilities with fixed interest rates. These fixed rate facilities had a contractual weighted average interest rate of 4.28%, are scheduled to mature between 2018 and 2029, and had a weighted average remaining term of 4.3 years as of December 31, 2017.

As of December 31, 2017, the Company had $2,702.4 million of total debt outstanding on facilities with interest rates based on floating rate indices (primarily LIBOR). These floating rate facilities had a contractual weighted average interest rate of 3.53%, are scheduled to mature between 2018 and 2024, and had a weighted average remaining term of 3.0 years as of December 31, 2017. Including the impact of the Company's interest rate swaps, the contractual weighted average interest rate on its floating rate facilities was 3.64% as of December 31, 2017.

The Company economically hedges the risks associated with fluctuations in interest rates on a portion of its floating rate borrowings by entering into interest rate swap agreements that convert a portion of its floating rate debt to a fixed rate basis, thus reducing the impact of interest rate changes on future interest expense. As of December 31, 2017, the Company had interest rate swaps in place with a net notional amount of $1,740.8 million to fix the floating interest rates on a portion of its floating rate debt obligations, with a weighted average fixed leg interest rate of 1.70% and a weighted average remaining term of 3.3 years.

As of December 31, 2017, the Company had $6,018.3 million of total debt which is at fixed rates or is effectively fixed due to interest rate swap contracts. This accounts for 86% of total debt. These facilities had a contractual weighted average interest rate of 4.35% and a weighted average remaining term of 4.0 years as of December 31, 2017.

Overall, the Company's total debt, including the impact of the swap contracts, had a contractual weighted average interest rate of 4.03% as of December 31, 2017.

Debt Facilities

Effective April 1, 2017, both TCIL and TAL obtained the necessary consents from lenders and noteholders to appoint TCIL as manager of all of TAL’s container fleet including those containers in special purpose entities of TAL.

Institutional Notes

In accordance with the institutional note agreements, interest payments on the Company's institutional notes are due semi-annually. Institutional note maturities typically range from 7 - 12 years, with level principal payments due annually following an interest-only period. The Company's institutional notes are pre-payable (in whole or in part) at the Company's option at any time, subject to certain provisions in the note agreements, including the payment of a make-whole premium in respect to such prepayment. These facilities provide for an advance rate against the net book values of designated eligible equipment generally in the range from 83% to 85%. These institutional notes had a contractual weighted average interest rate of 4.77% as of December 31, 2017 and are scheduled to mature between 2018 and 2029.

On July 13, 2017, the Company completed an offering of $250.0 million of senior secured notes. The Series 2017 A-1 notes have an original principal amount of $105.0 million, an interest rate of 4.35%, and a scheduled maturity of June 30, 2027. The 2017 Series A-2 notes have an original principal amounts of $145.0 million, an interest rate of 4.64%, and a scheduled maturity of June 30, 2029.

Asset-Backed Securitization Term Notes

Under the Company’s Asset-Backed Securitization (“ABS”) facilities, indirect wholly-owned subsidiaries of the Company issue asset-backed notes. The issuance of asset-backed notes is the primary business objective of those subsidiaries. The ABS facilities are intended to be bankruptcy remote so that such assets are not available to creditors of the Company or its affiliates until and unless the related secured borrowings have been fully discharged. These transactions do not meet accounting requirements for sales treatment and are recorded as secured borrowings.

The Company’s borrowings under the ABS facilities amortize in monthly installments, typically in level payments over ten years. These facilities provide for an advance rate against the net book values of designated eligible equipment generally in the range from 77% to 87%. The net book values for purposes of calculating eligible equipment is determined according to the related debt agreement and may be different than those calculated per U.S. GAAP. The Company is required to maintain restricted cash balances on deposit in designated bank accounts equal to three to nine months of interest expense depending on the type of facility.

Note 6—Debt (continued)

These asset-backed securitization term notes had a contractual weighted average interest rate of 3.62% as of December 31, 2017 and are scheduled to mature between 2018 and 2027.

On April 7, 2017, the Company completed an offering of $281.0 million of Class A fixed rate asset-backed notes. The notes have a contractual interest rate of 4.50% and a scheduled maturity of April 20, 2027.

On June 15, 2017, the Company completed an offering of $318.9 million of Class A and B fixed rate asset-backed notes. The notes have a contractual weighted average interest rate of 3.57% and a scheduled maturity date of June 21, 2027.

On July 20, 2017, the Company terminated and paid down $80.1 million of its principal amount on an asset-backed note.

On August 14, 2017, the Company terminated and paid down $257.4 million of its principal amount on an asset-backed note.

On August 23, 2017, the Company completed an offering of $450.0 million of Class A and B fixed rate asset-backed notes. The notes have a contractual weighted average interest rate of 3.66% and a scheduled maturity of August 20, 2027.

On September 29, 2017, the Company completed an offering of $540.0 million asset-backed notes. The notes have a contractual interest rate of one-month LIBOR plus 2.15% margin with a scheduled maturity date of September 20, 2022.

Term Loan Facilities

The term loan facilities amortize in monthly or quarterly installments. These facilities provide for an advance rate against the net book values of designated eligible equipment generally in the range from 80% and 83%. These term loan facilities had a contractual weighted average interest rate of 3.50% as of December 31, 2017, and are scheduled to mature between 2019 and 2022.

On January 20, 2017, the Company increased its borrowing on a term loan facility by $50.0 million. This incremental borrowing has a contractual interest rate of one-month LIBOR plus 2.35% margin and a scheduled maturity date of December 19, 2020 which is aligned with the previous loans under the facility.

On January 25, 2017, the Company increased its borrowing on a term loan facility by $50.0 million. This incremental borrowing has a contractual interest rate of one-month LIBOR plus 2.50% margin and a scheduled maturity date of June 20, 2022 which is aligned with the previous loans under the facility.

On February 24, 2017, the Company secured financing on its property for $18.8 million. This arrangement has a contractual interest rate of three-month LIBOR plus 2.25% margin and a scheduled maturity date of March 1, 2020.

On March 13, 2017, the Company increased its borrowings on a term loan facility by $25.0 million. This incremental borrowing has a contractual interest rate of one-month LIBOR plus 2.50% margin and a scheduled maturity date of June 20, 2022 which is aligned with the previous loans under this facility.

On June 16, 2017, the Company entered into a term loan facility of $260.0 million. This term loan facility has a contractual interest rate of three-month LIBOR plus 2.25% margin and a scheduled maturity date of June 16, 2022.

On June 20, 2017, the Company increased its borrowings on a term loan facility by $50.0 million. This incremental borrowing has a contractual interest rate of three-month LIBOR plus 2.25% margin and a scheduled maturity date of June 20, 2021 which is aligned with the previous loans under this facility.

Asset-Backed Warehouse Facilities

Under the Company’s Asset-Backed Warehouse (“ABW”) facilities, indirect wholly-owned subsidiaries of the Company issue asset-backed notes. The issuance of asset-backed notes is the primary business objective of those subsidiaries. The ABW facilities are intended to be bankruptcy remote so that such assets are not available to creditors of the Company or its affiliates until and unless the related secured borrowings have been fully discharged. These transactions do not meet accounting requirements for sales treatment and are recorded as secured borrowings.

Note 6—Debt (continued)

The asset-backed warehouse facilities have a maximum borrowing capacity of $600.0 million. Under these facilities, funds are available on a revolving basis until a conversion date, after which if the facilities are not refinanced, the notes will convert to term notes. During the revolving period, the borrowing capacity under the facilities is determined by applying an advance rate against the net book values of designated eligible equipment. The approximate average advance rate for the two facilities is 80%. The net book values for purposes of calculating eligible equipment is determined according to the related debt agreement and may be different than those calculated per U.S. GAAP. The Company is required to maintain restricted cash balances on deposit in designated bank accounts equal to three to five months of interest expense.

On March 10, 2017, the Company entered into a floating rate ABS warehouse facility with a borrowing capacity of $400.0 million. The first tranche of $200.0 million, which was subsequently canceled on October 20, 2017, had a one year revolving period followed by an eighteen month term period. The second tranche of $200.0 million has a two year revolving period followed by a three year term period. The facility has a contractual interest rate of three-month LIBOR plus 2.25% margin until March 10, 2019 when it would convert to a term note that has a contractual interest rate of three-month LIBOR plus 3.25% margin with a scheduled maturity date of March 21, 2022.

On September 29, 2017, the Company terminated an ABS warehouse facility which had a borrowing capacity of $750.0 million and entered into a new ABS warehouse facility with a borrowing capacity of $400.0 million. This ABS warehouse facility has a contractual interest rate of one-month LIBOR plus 1.85% margin until September 28, 2020 when it would convert to a term note that has a contractual interest rate of 2.85% with a scheduled maturity date of September 20, 2024.

Revolving Credit Facilities

We have two revolving credit facilities which have a maximum borrowing capacity of $1,075.0 million. These facilities provide for an advance rate against the net book values of designated eligible equipment. The approximate average advance rate for the two facilities is 83%. These revolving credit facilities had a contractual weighted average interest rate of 3.67% as of December 31, 2017 and are scheduled to mature between 2020 and 2022.

On June 16, 2017, the Company terminated a $450.0 million revolving credit facility and increased its credit limit on a separate facility from $600.0 million to $1,025.0 million, and extended the term of the facility to June 16, 2022. This revolving credit facility’s interest rate remained at one-month LIBOR plus 2.00% margin.

Debt maturities excluding capital lease obligations (amounts in thousands):



Years ending December 31,
2018	$	715,385
2019	1,166,760
2020	998,683
2021	840,283
2022	1,465,378
2023 and thereafter	1,689,979
Total	$	6,876,468

Capital Lease Obligations

The Company has entered into a series of direct finance lease transactions with various financial institutions to finance chassis and containers. Each lease is accounted for as a capital lease, with interest expense recognized on a level yield basis over the period preceding early purchase options, if any, which is generally three to ten years from the transaction date. These agreements have fixed interest rates ranging from 3.26% to 4.93%, and mature between 2018 and 2024.

The Company entered into two lease transactions with financial institutions to finance the purchase of new containers for approximately $35 million during the first quarter of 2017. The lease transactions are accounted for as capital leases over the term period and contain early buyout options.

Note 6—Debt (continued)

At December 31, 2017, future lease payments under these capital leases were as follows (in thousands):



Years ending December 31,
2018	$	31,954
2019	11,210
2020	10,766
2021	10,766
2022	10,766
2023 and thereafter	42,658
Total future payments	118,120
Less: amount representing interest	(14,711		)
Capital lease obligations	$	103,409