Debt

3 Months Ended

Mar. 31, 2022

Debt Disclosure [Abstract]

Debt

Debt

The carrying amounts of our long-term debt are as follows:

	March 31, 2022		December 31, 2021
	(in millions)
Corporate – Recourse:
Revolving credit facility	$	50.0	$	—
Senior notes, net of unamortized discount of $0.1 and $0.1	399.9		399.9
	449.9		399.9
Less: unamortized debt issuance costs	(1.1)		(1.2)
Total recourse debt	448.8		398.7
Leasing – Non-recourse:
Wholly-owned subsidiaries:
Secured railcar equipment notes, net of unamortized discount of $0.5 and $0.5	2,228.1		2,257.5
2017 promissory notes, net of unamortized discount of $7.3 and $7.8	747.7		760.2
TILC warehouse facility	617.4		561.8
	3,593.2		3,579.5
Less: unamortized debt issuance costs	(22.3)		(23.7)
	3,570.9		3,555.8
Partially-owned subsidiaries:
Secured railcar equipment notes, net of unamortized discount of $0.3 and $0.3	897.3		903.5
TRIP Railcar Co. term loan	321.0		323.7
	1,218.3		1,227.2
Less: unamortized debt issuance costs	(10.5)		(11.1)
	1,207.8		1,216.1
Total non–recourse debt	4,778.7		4,771.9
Total debt	$	5,227.5	$	5,170.6

Estimated Fair Value of Debt – The estimated fair value of our 4.55% senior notes due 2024 ("Senior Notes") is based on a quoted market price in a market with little activity (Level 2 input). The estimated fair values of our secured railcar equipment notes are based on our estimate of their fair value using unobservable input values provided by a third party (Level 3 inputs). The respective carrying values of our revolving credit facility, 2017 promissory notes, TILC warehouse facility, and TRIP Railcar Co. term loan approximate fair value because the interest rate adjusts to the market interest rate. The estimated fair values of our long-term debt are as follows:

	March 31, 2022		December 31, 2021
	(in millions)
Level 1	$	1,736.1	$	1,645.7
Level 2	406.5		420.8
Level 3	3,046.3		3,215.4
	$	5,188.9	$	5,281.9

Revolving Credit Facility – We have a $450.0 million unsecured corporate revolving credit facility. During the three months ended March 31, 2022, we had total borrowings of $70.0 million and total repayments of $20.0 million under the revolving credit facility. Additionally, we had outstanding letters of credit issued in an aggregate amount of $28.3 million. Of the $371.7 million remaining unused amount, $192.1 million was available for borrowing as of March 31, 2022. The outstanding letters of credit as of March 31, 2022 are scheduled to expire in July 2022. The revolving credit facility bears interest at a variable rate which resulted in an interest rate of LIBOR plus 1.75%, with a LIBOR floor of 0.30%, as of March 31, 2022. A commitment fee accrues on the average daily unused portion of the revolving facility at the rate of 0.175% to 0.40% (0.25% as of March 31, 2022).

The revolving credit facility requires the maintenance of ratios related to minimum interest coverage for the leasing and manufacturing operations and maximum leverage. In December 2021, we amended our revolving credit facility to increase the maximum leverage ratio through June 30, 2022. As of March 31, 2022, we were in compliance with all such financial covenants.

TILC Warehouse Loan Facility – TILC has a $1.0 billion warehouse loan facility, which was established to finance railcars owned by TILC. During the three months ended March 31, 2022, we had total borrowings of $57.2 million and total repayments of $1.6 million under the TILC warehouse loan facility. The entire unused facility amount of $382.6 million was available as of March 31, 2022 based on the amount of warehouse-eligible, unpledged equipment. Advances under the facility bear interest at a defined index rate plus a facility margin of 185 basis points, for an all-in interest rate of 2.09% at March 31, 2022.

Subsequent event – TRL-2022 – On April 20, 2022, Trinity Rail Leasing 2022 LLC, a Delaware limited liability company ("TRL-2022") and a limited purpose, indirect wholly-owned subsidiary of the Company owned through TILC, entered into a Note Purchase Agreement dated April 20, 2022 (the "Note Purchase Agreement"). The Note Purchase Agreement provides for the issuance and sale of an aggregate principal amount of $244.8 million of its Series 2022-1 Class A Green Secured Railcar Equipment Notes (the "TRL-2022 Notes"). The TRL-2022 Notes will bear interest at a fixed rate of 4.55%, will be payable monthly, and will have a stated final maturity date of May 20, 2052. The TRL-2022 Notes will be obligations of TRL-2022 and will be non-recourse to Trinity. The obligations will be secured by a portfolio of railcars and operating leases thereon, certain cash reserves, and other assets to be acquired and owned by TRL-2022.

Terms and conditions of our other long-term debt, including recourse and non-recourse provisions and scheduled maturities, are described in Note 8 of our 2021 Annual Report on Form 10-K.