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Revolving Credit Facility
6 Months Ended
Jun. 30, 2013
Revolving Credit Facility [Abstract]  
Revolving Credit Facility

Note 11 – Revolving Credit Facility

 

On July 26, 2013, the Company entered into a new $50,000 senior secured revolving credit facility and cancelled its previous credit facility. The new revolving credit facility can be used for general corporate purposes, including working capital. As of August 9, 2013, the Company had no borrowings under the new revolving credit facility. The new revolving credit facility also contains a sub-facility for letters of credit not to exceed the lesser of $30,000 and the amount of the senior secured revolving credit facility at such time. The Company had no outstanding letters of credit under the new revolving credit facility as of August 9, 2013.

The Company entered into the new revolving credit facility pursuant to a Credit Agreement dated July 26, 2013 (the "Revolving Loan Agreement") by and among FreightCar and certain of its subsidiaries, as borrowers and guarantors (together with the Company, the "Borrowers"), and Bank of America, N.A., as lender. The Revolving Loan Agreement has a term ending on July 26, 2016 and revolving loans outstanding thereunder will bear interest at a rate of LIBOR plus an applicable margin of 1.50% or at a base rate, as selected by the Company. Base rate loans will bear interest at the highest of (a) the Federal Funds Rate plus 0.50%, (b) the prime rate or (c) LIBOR plus 1.00%. The Company is required to pay a non-utilization fee of between 0.10% and 0.30% on the unused portion of the revolving loan commitment depending on the Company's quarterly average balance of unrestricted cash and the Company's consolidated leverage ratio. Borrowings under the Revolving Loan Agreement are secured by a first priority perfected security interest in substantially all of the Company's assets excluding railcars held by its railcar leasing subsidiary, JAIX. The Borrowers also agreed to pledge all of the equity interests in the Company's direct and indirect domestic subsidiaries. The Revolving Loan Agreement has both affirmative and negative covenants, including, without limitation, a minimum consolidated net liquidity requirement of $35,000 and limitations on indebtedness, liens and investments. The Revolving Loan Agreement also provides for customary events of default.

 

The Revolving Loan Agreement replaces the Company's prior revolving credit facility pursuant to a Loan and Security Agreement dated as of July 29, 2010 among FreightCar and certain of its subsidiaries, as borrowers (collectively, the "Borrowers"), and Fifth Third Bank, as lender (the "Prior Credit Agreement"), which was terminated and cancelled effective July 26, 2013.

 

The Prior Credit Agreement consisted of a $30,000 senior secured revolving credit facility and a sub-facility for letters of credit not to exceed $20,000. The Prior Credit Agreement had a term ending on July 29, 2013 and bore interest at a rate of LIBOR plus an applicable margin of 2.50% or at prime, as selected by the Company. The Company was required to pay a non-utilization fee of 0.35% on the unused portion of the revolving loan commitment under the Prior Credit Agreement. Borrowings under the Prior Credit Agreement were secured by the Company's accounts receivable, inventory and certain other assets of the Company, and borrowing availability was tied to a borrowing base of eligible accounts receivable and inventory. The Prior Credit Agreement had both affirmative and negative covenants, including, without limitation, a minimum tangible net worth covenant and limitations on indebtedness, liens and investments.

As of June 30, 2013 and December 31, 2012, the Company had no borrowings and therefore had $30,000 available under the Prior Credit Agreement. The Company had no outstanding letters of credit under the Prior Credit Agreement as of June 30, 2013 and December 31, 2012.