Debt

The following table summarizes the components of debt as of March 31, 2018 and December 31, 2017:



	March 31, 2018			December 31, 2017
	(in millions)
Corporate – Recourse:
Revolving credit facility	$	—		$	—
Senior notes, net of unamortized discount of $0.3 and $0.3	399.7			399.7
Convertible subordinated notes, net of unamortized discount of $3.3 and $8.2	446.1			441.2
Other	0.5			0.5
	846.3			841.4
Less: unamortized debt issuance costs	(2.7		)	(2.9		)
	843.6			838.5
Leasing – Recourse:
Capital lease obligations	27.4			28.3
Total recourse debt	871.0			866.8

Leasing – Non-recourse:
Wholly-owned subsidiaries:
2006 secured railcar equipment notes	152.8			158.5
2009 secured railcar equipment notes	164.8			166.2
2010 secured railcar equipment notes	264.3			266.9
2017 promissory notes	289.8			293.6
TILC warehouse facility	154.5			150.7
	1,026.2			1,035.9
Less: unamortized debt issuance costs	(13.9		)	(11.1		)
	1,012.3			1,024.8
Partially-owned subsidiaries:
TRL 2012 secured railcar equipment notes	397.1			402.8
TRIP Master Funding secured railcar equipment notes	957.0			962.5
	1,354.1			1,365.3
Less: unamortized debt issuance costs	(14.0		)	(14.5		)
	1,340.1			1,350.8
Total non–recourse debt	2,352.4			2,375.6
Total debt	$	3,223.4		$	3,242.4

We have a $600.0 million unsecured corporate revolving credit facility that matures in May 2020. As of March 31, 2018, we had letters of credit issued under our revolving credit facility in an aggregate principal amount of $78.8 million, leaving $521.2 million available for borrowing. Other than these letters of credit, there were no borrowings under our revolving credit facility as of March 31, 2018, or during the three month period then ended. Of the outstanding letters of credit as of March 31, 2018, approximately $78.0 million is expected to expire in 2018 and the remainder in 2019. 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 March 31, 2018, 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 (the “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 Notes under certain circumstances. The Notes mature on June 1, 2036, unless redeemed, repurchased, or converted earlier. We may not redeem the Notes before June 1, 2018. On or after that date, we may redeem all or part of the 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 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 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 March 31, 2018 and December 31, 2017, capital in excess of par value included $92.5 million related to the estimated value of the 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 Notes. Total interest expense recognized on the Notes for the three months ended March 31, 2018 and 2017 is as follows:



	Three Months Ended March 31,
	2018		2017
	(in millions)
Coupon rate interest	$	4.4	$	4.4
Amortized debt discount	4.9		4.5
	$	9.3	$	8.9

Holders of the 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 Notes to be converted. Any conversion obligation in excess of the aggregate principal amount of the 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 $24.21 per share as of March 31, 2018. The Notes were subject to conversion as of April 1, 2018.

On April 23, 2018, the Company gave notice of its election to redeem all of the outstanding Notes on June 1, 2018 pursuant to the terms of the Indenture governing the Notes. The outstanding Notes will be redeemed for cash equal to 100% of the principal amount of the Notes, plus accrued and unpaid interest to, but excluding, June 1, 2018. As of April 23, 2018, there were approximately $449.4 million aggregate principal amount of Notes outstanding.

In addition, the Company notified the trustee, pursuant to the Indenture governing the Notes, that the Notes became convertible as a result of the Company’s election to redeem the Notes. Subject to the terms of the Indenture and the Notes, holders may convert their Notes at any time until 5:00 p.m., New York City time, on May 30, 2018. The current conversion rate of the Notes is 41.439 shares of the Company’s common stock per $1,000 principal amount of the Notes. Upon conversion, the Company will deliver to the holders in respect of each $1,000 principal amount of Notes being converted a “settlement amount,” as defined in the Indenture governing the Notes, equal to the sum of the daily settlement amounts for each of the 20 consecutive trading days of the cash settlement averaging period. Although the Company has the option to make the conversion payments in cash and shares of the Company’s common stock (or cash in lieu of some or all of the shares of common stock), the Company intends to make the entire conversion payment with respect to all Notes converted solely in cash.

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 TILC warehouse loan facility, established to finance railcars owned by TILC, had $154.5 million in outstanding borrowings as of March 31, 2018. In March 2018, the facility, previously totaling $1.0 billion, was extended through March 2021 at a reduced amount of $750.0 million at the Company's election. Under the renewed facility, the entire unused facility amount of $595.5 million was available as of March 31, 2018 based on the amount of warehouse-eligible, unpledged equipment. The warehouse loan facility is a non-recourse obligation 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 renewed facility bear interest at a defined index rate plus a margin, for an all-in interest rate of 3.57% at March 31, 2018. Amounts outstanding at maturity, absent renewal, are payable under the renewed facility in March 2022.

Terms and conditions of other debt, including recourse and non-recourse provisions, are described in Note 11 of the December 31, 2017 Consolidated Financial Statements filed on Form 10-K.

The remaining principal payments under existing debt agreements as of March 31, 2018, after considering the notice to redeem the Notes are as follows:



	Remaining nine months of 2018		2019		2020		2021		2022		Thereafter
	(in millions)
Recourse:
Corporate	$	449.5	$	0.1	$	0.2	$	0.1	$	—	$	400.0
Leasing – capital lease obligations (Note 6)	20.5		6.9		—		—		—		—
Non-recourse – leasing (Note 6):
2006 secured railcar equipment notes	19.8		28.0		29.8		29.2		29.9		16.1
2009 secured railcar equipment notes	5.0		11.2		6.6		13.4		14.1		114.5
2010 secured railcar equipment notes	7.4		7.6		14.2		20.1		21.0		194.0
2017 promissory notes	11.3		15.1		15.1		15.1		15.1		218.1
TILC warehouse facility	4.6		6.2		6.2		6.2		1.5		—
Facility termination payments - TILC warehouse facility	—		—		—		—		129.8		—
TRL 2012 secured railcar equipment notes	17.4		21.9		19.3		19.9		19.6		299.0
TRIP Master Funding secured railcar equipment notes	14.8		23.8		32.9		40.4		40.6		804.5
Total principal payments	$	550.3	$	120.8	$	124.3	$	144.4	$	271.6	$	2,046.2