Notes Payable, net

6 Months Ended

Feb. 29, 2024

Debt Disclosure [Abstract]

Notes Payable, net

Note 8 – Notes Payable, net

(In millions)	February 29, 2024			August 31, 2023
Leasing nonrecourse term loans	$	806.0		$	640.2
Senior term debt		259.0			266.4
2.875% Convertible senior notes, due 2028		373.8			373.8
2.875% Convertible senior notes, due 2024		—			47.7
Other notes payable		1.6			1.8
	$	1,440.4		$	1,329.9
Debt discount and issuance costs		(18.6	)		(18.2	)
	$	1,421.8		$	1,311.7

Leasing nonrecourse term loans include:

•$343.0 million of nonrecourse senior term debt, which is secured by a pool of leased railcars. The principal balance as of February 29, 2024 was $326.6 million.

•$501.8 million of Asset-backed term notes, as discussed below. The principal balance as of February 29, 2024 was $479.4 million.

The Company's 2.875% Convertible senior notes, due 2024 (2024 Convertible Notes), matured on February 1, 2024. The outstanding principal balance of $47.7 million plus accrued interest was settled in cash on the maturity date to retire the 2024 Convertible Notes.

Terms and conditions, including recourse and nonrecourse provisions and scheduled maturities, and other long-term debt are described in Note 13 of our 2023 Annual Report on Form 10-K.

Asset-backed term notes

GBX Leasing 2022-1 LLC (GBXL I) was formed as a wholly owned special purpose entity of GBX Leasing to securitize the leasing assets of GBX Leasing. On November 20, 2023, GBXL I (Issuer) issued $178.5 million of term notes secured by a portfolio of railcars and associated operating leases and other assets, acquired and owned by GBXL I (the 2023 GBXL Notes). Issued debt of GBXL I as of February 29, 2024 includes the $323.3 million GBXL I Series 2022-1 Notes, as described in Note 3 of our 2023 Annual Report on Form 10-K, and the 2023 GBXL Notes, collectively the GBXL Notes. GBX Leasing used the net proceeds received from the issuance of the term notes to pay down the GBX Leasing warehouse credit facility.

The 2023 GBXL Notes include $158.9 million of GBXL I Series 2023-1 Class A Secured Railcar Equipment Notes (2023 Class A Notes) and $19.6 million of GBXL I Series 2023-1 Class B Secured Railcar Equipment Notes (2023 Class B Notes). The 2023 GBXL Notes bear interest at fixed rates of 6.42% and 7.28% for the 2023 Class A Notes and 2023 Class B Notes, respectively. The 2023 GBXL Notes are payable monthly and have a legal maturity date of November 20, 2053. The Company incurred $2.2 million in debt issuance costs, which will be amortized to interest expense through the expected repayment period. Both 2023 Class A and Class B Notes have an anticipated repayment date of November 20, 2030 and a legal maturity date. While the legal maturity date is in 2053, the cash flows generated from the railcar assets will pay down the 2023 GBXL Notes in line with the agreement, which based on expected cash flow payments, would result in repayment in advance of the legal maturity date. If the principal amount of the 2023 GBXL Notes has not been repaid in full by the anticipated repayment date, then the Issuer will also be required to pay additional interest to the holders at a rate equal to 4.00% per annum.

The GBXL Notes are obligations of the Issuer only and are nonrecourse to Greenbrier. The GBXL Notes are subject to a Master Indenture between the Issuer and U.S. Bank Trust Company, National Association, as trustee, as supplemented by the Series 2022-1 Supplement dated February 9, 2022 and the Series 2023-1 Supplement dated November 20, 2023. The GBXL Notes may be subject to acceleration upon the occurrence of certain events of default.

The following table summarizes the Issuer's net carrying amount of the debt and related assets.

(in millions)	February 29, 2024		August 31, 2023
Assets
Restricted cash	$	7.4	$	6.7
Equipment on operating leases, net	$	645.2	$	388.9
Liabilities
Notes payable, net	$	472.0	$	302.1