Debt

The following table summarizes the components of debt as of September 30, 2017 and December 31, 2016:



	September 30, 2017			December 31, 2016
	(in millions)
Corporate – Recourse:
Revolving credit facility	$	—		$	—
Senior notes, net of unamortized discount of $0.3 and $0.4	399.7			399.6
Convertible subordinated notes, net of unamortized discount of $12.9 and $26.7	436.5			422.7
Other	0.5			—
	836.7			822.3
Less: unamortized debt issuance costs	(3.1		)	(3.7		)
	833.6			818.6
Leasing – Recourse:
Capital lease obligations, net of unamortized debt issuances costs of $0.1 and $0.1	29.3			32.0
Total recourse debt	862.9			850.6

Leasing – Non-recourse:
Wholly-owned subsidiaries:
2006 secured railcar equipment notes	164.4			194.2
2009 secured railcar equipment notes	167.7			172.5
2010 secured railcar equipment notes	269.9			280.6
2017 promissory notes	297.4			—
TILC warehouse facility	166.7			204.1
	1,066.1			851.4
Less: unamortized debt issuance costs	(12.0		)	(11.4		)
	1,054.1			840.0
Partially-owned subsidiaries:
TRL 2012 secured railcar equipment notes	408.2			425.5
TRIP Master Funding secured railcar equipment notes	966.2			955.5
	1,374.4			1,381.0
Less: unamortized debt issuance costs	(15.0		)	(15.0		)
	1,359.4			1,366.0
Total non–recourse debt	2,413.5			2,206.0
Total debt	$	3,276.4		$	3,056.6

We have a $600.0 million unsecured corporate revolving credit facility that matures in May 2020. As of September 30, 2017, we had letters of credit issued under our revolving credit facility in an aggregate principal amount of $82.6 million, leaving $517.4 million available for borrowing. Other than these letters of credit, there were no borrowings under our revolving credit facility as of September 30, 2017, or during the nine month period then ended. Of the outstanding letters of credit as of September 30, 2017, approximately $3.8 million is expected to expire in 2017 and the remainder primarily in 2018. The majority of our letters of credit obligations support the Company’s various insurance programs and generally renew by their terms each year. Trinity’s revolving credit facility requires the maintenance of ratios related to minimum interest coverage for the leasing and manufacturing operations and maximum leverage. As of September 30, 2017, we were in compliance with all such financial covenants. Borrowings under the credit facility bear interest at a defined index rate plus a margin and are guaranteed by certain 100%-owned subsidiaries of the Company.

The Company's Convertible Subordinated Notes due 2036 (“Convertible Subordinated Notes”) bear an interest rate of 3 7/8% per annum on the principal amount payable semi-annually in arrears on June 1 and December 1 of each year. In addition, commencing with the six-month period beginning June 1, 2018 and for each six-month period thereafter, we will pay contingent interest to the holders of the Convertible Subordinated Notes under certain circumstances. The Convertible Subordinated Notes mature on June 1, 2036, unless redeemed, repurchased, or converted earlier. We may not redeem the Convertible Subordinated Notes before June 1, 2018. On or after that date, we may redeem all or part of the Convertible Subordinated Notes for cash at 100% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest (including any contingent interest) up to, but excluding, the redemption date. Holders of the Convertible Subordinated Notes may require us to purchase all or a portion of their notes on June 1, 2018 or upon a fundamental change, in each case for cash at a price equal to 100% of the principal amount of the notes to be purchased plus any accrued and unpaid interest (including any contingent interest) up to, but excluding, the purchase date.

The Convertible Subordinated Notes are recorded net of unamortized discount to reflect their underlying economics by capturing the value of the conversion option as borrowing costs. As of September 30, 2017 and December 31, 2016, capital in excess of par value included $92.5 million related to the estimated value of the Convertible Subordinated Notes’ conversion options, in accordance with ASC 470-20. Debt discount recorded in the consolidated balance sheet is being amortized through June 1, 2018 to yield an effective annual interest rate of 8.42% based upon the estimated market interest rate for comparable non-convertible debt as of the issuance date of the Convertible Subordinated Notes. Total interest expense recognized on the Convertible Subordinated Notes for the three and nine months ended September 30, 2017 and 2016 is as follows:



	Three Months Ended September 30,				Nine Months Ended September 30,
	2017		2016		2017		2016
	(in millions)
Coupon rate interest	$	4.4	$	4.4	$	13.1	$	13.1
Amortized debt discount	4.7		4.3		13.8		12.7
	$	9.1	$	8.7	$	26.9	$	25.8

Holders of the Convertible Subordinated Notes may convert their notes under the following circumstances: 1) if the daily closing price of our common stock is greater than or equal to 130% of the conversion price during 20 of the last 30 trading days of the preceding calendar quarter; 2) upon notice of redemption; or 3) upon the occurrence of specified corporate transactions pursuant to the terms of the applicable indenture. Upon conversion, the Company is required to pay cash up to the aggregate principal amount of the Convertible Subordinated Notes to be converted. Any conversion obligation in excess of the aggregate principal amount of the Convertible Subordinated Notes to be converted may be settled in cash, shares of the Company’s common stock, or a combination of cash and shares of the Company’s common stock, at the Company’s election. The conversion price, which is subject to adjustment upon the occurrence of certain events, was $24.34 per share as of September 30, 2017. The Convertible Subordinated Notes were not subject to conversion as of October 1, 2017. See Note 17 Earnings Per Common Share for an explanation of the effects of the Convertible Subordinated Notes on earnings per share. The Company has not entered into any derivatives transactions associated with these notes.

The $1.0 billion TILC warehouse loan facility, established to finance railcars owned by TILC, had $166.7 million in outstanding borrowings as of September 30, 2017. Under the facility, $833.3 million was unused and available as of September 30, 2017 based on the amount of warehouse-eligible, unpledged equipment. The warehouse loan facility is a non-recourse obligation which expires in April 2018 and is secured by a portfolio of railcars and operating leases, certain cash reserves, and other assets acquired and owned by the warehouse loan facility trust. The principal and interest of this indebtedness are paid from the cash flows of the underlying leases. Advances under the facility bear interest at a defined index rate plus a margin, for an all-in interest rate of 3.05% at September 30, 2017. Amounts outstanding at maturity, absent renewal, are payable under the facility in April 2019.

On May 15, 2017, Trinity Rail Leasing 2017, LLC, a Delaware limited liability company ("TRL 2017") and a limited purpose, indirect wholly-owned subsidiary of the Company owned through TILC, issued $302.4 million of promissory notes (the "2017 Promissory Notes") due May 15, 2024, of which $297.4 million was outstanding as of September 30, 2017. The 2017 Promissory Notes are obligations of TRL 2017 and are non-recourse to Trinity. The 2017 Promissory Notes bear interest at Libor plus a margin for an all-in interest rate of 3.00% as of September 30, 2017, payable monthly. The 2017 Promissory Notes are secured by a portfolio of railcars and operating leases thereon, certain cash reserves, and other assets acquired and owned by TRL 2017.

On August 15, 2017, TRIP Master Funding issued $237.9 million in aggregate principle amount of Series 2017-1 Secured Railcar Equipment Notes pursuant to the Master Indenture between TRIP Master Funding and Wilmington Trust Company, as indenture trustee, with a final maturity date of August 2047. The proceeds from the issuance were used primarily to retire the TRIP Master Funding Secured Railcar Equipment Notes Class A-1a and Class A-1b notes as well as the TRIP Master Funding Series 2014-1 Secured Railcar Equipment Notes Class A-1 notes in full. The TRIP Master Funding Series 2017-1 Secured Railcar Equipment Notes consist of two classes with the Class A-1 notes bearing interest at 2.71% and the Class A-2 notes bearing interest at 3.74%. The TRIP Master Funding Series 2017-1 Secured Railcar Equipment Notes are non-recourse to Trinity, TILC, TRIP Holdings, and the other equity investors in TRIP Holdings and are secured by TRIP Master Funding's portfolio of railcars and operating leases thereon, its cash reserves, and all other assets owned by TRIP Master Funding. As of September 30, 2017, there were $101.0 million and $134.9 million of Class A-1 and Class A-2 notes outstanding, respectively.

Terms and conditions of other debt, including recourse and non-recourse provisions, are described in Note 11 of the December 31, 2016 Consolidated Financial Statements filed on Form 10-K.

The remaining principal payments under existing debt agreements as of September 30, 2017 are as follows:



	Remaining three months of 2017		2018		2019		2020		2021		Thereafter
	(in millions)
Recourse:
Corporate⁽¹⁾	$	—	$	0.1	$	0.1	$	0.2	$	0.1	$	849.4
Leasing – capital lease obligations (Note 6)	0.9		28.5		—		—		—		—
Non-recourse – leasing (Note 6):
2006 secured railcar equipment notes	6.1		25.3		28.0		29.8		29.2		46.0
2009 secured railcar equipment notes	1.6		6.4		11.2		6.6		13.4		128.5
2010 secured railcar equipment notes	2.9		10.0		7.6		14.2		20.1		215.1
2017 promissory notes	3.8		15.1		15.1		15.1		15.1		233.2
TILC warehouse facility	1.7		6.9		1.7		—		—		—
Facility termination payments - TILC warehouse facility	—		—		156.4		—		—		—
TRL 2012 secured railcar equipment notes	5.5		22.9		21.9		19.3		19.9		318.7
TRIP Master Funding secured railcar equipment notes	3.6		20.0		23.8		32.9		40.4		845.5
Total principal payments	$	26.1	$	135.2	$	265.8	$	118.1	$	138.2	$	2,636.4

⁽¹⁾ Holders of the Convertible Subordinated Notes may require us to purchase all or a portion of their notes on June 1, 2018. On or after that date, we may redeem all or part of the Convertible Subordinated Notes.