Debt

The following table summarizes the components of debt as of September 30, 2018 and December 31, 2017:



	September 30, 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 $- and $8.2	—			441.2
Other	0.4			0.5
	400.1			841.4
Less: unamortized debt issuance costs	(2.4		)	(2.9		)
	397.7			838.5
Leasing – Recourse:
Capital lease obligations	26.5			28.3
Total recourse debt	424.2			866.8

Leasing – Non-recourse:
Wholly-owned subsidiaries:
2006 secured railcar equipment notes	139.4			158.5
2009 secured railcar equipment notes	161.7			166.2
2010 secured railcar equipment notes	258.9			266.9
2017 promissory notes	282.3			293.6
2018 secured railcar equipment notes, net of unamortized discount of $0.2 and $-	477.3			—
TILC warehouse facility	228.7			150.7
	1,548.3			1,035.9
Less: unamortized debt issuance costs	(17.3		)	(11.1		)
	1,531.0			1,024.8
Partially-owned subsidiaries:
TRL 2012 secured railcar equipment notes	386.7			402.8
TRIP Master Funding secured railcar equipment notes	946.9			962.5
	1,333.6			1,365.3
Less: unamortized debt issuance costs	(13.1		)	(14.5		)
	1,320.5			1,350.8
Total non–recourse debt	2,851.5			2,375.6
Total debt	$	3,275.7		$	3,242.4

We have a $600.0 million unsecured corporate revolving credit facility that matures in May 2020. As of September 30, 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 September 30, 2018, or during the nine month period then ended. Of the outstanding letters of credit as of September 30, 2018, all are expected to expire 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 September 30, 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.

On April 23, 2018, the Company issued a Notice of Redemption with respect to the 3 7/8% Convertible Subordinated Notes (the "Notes") to redeem the Notes on June 1, 2018 (the "Redemption Date") at a redemption price in cash equal to 100% of their principal amount plus accrued but unpaid interest (including any contingent interest), if any, to but excluding June 1, 2018. Immediately prior to the Redemption Date, the aggregate principal amount of Notes outstanding was approximately $449.3 million.

Prior to May 30, 2018 (the "Conversion Deadline"), holders of approximately $448.5 million aggregate principal amount of the Notes submitted notices for conversion of their Notes. As a result, on June 1, 2018, the Company redeemed the remaining approximately $0.8 million aggregate principal amount of the Notes for an aggregate cash amount of approximately $0.8 million, including the accrued and unpaid interest to, but excluding, June 1, 2018. Pursuant to the terms of the indenture governing the Notes, the settlement of the Notes submitted for conversion occurred on various dates between May 30, 2018 and July 3, 2018. The Company elected to exercise its rights to settle the converting Notes in cash rather than in shares of common stock or a combination of cash and shares of common stock. The Company has completed conversion settlements for the remaining Notes, for an aggregate cash amount of approximately $646.6 million. Following the redemption and settlement of the conversions, there were no Notes outstanding under the indenture, and the indenture was satisfied and discharged in accordance with its terms.

The Notes were originally recorded net of unamortized discount to reflect their underlying economics by capturing the value of the conversion option at the time of issuance as borrowing costs. As of 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 was 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. Upon redemption of the Notes, a charge to capital in excess of par value in the amount of $152.9 million, net of tax, was recorded equal to the redemption amount in excess of the par value of the Notes representing the fair value of the conversion option redeemed.

Total interest expense recognized on the Notes for the three and nine months ended September 30, 2018 and 2017 is as follows:



	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
	(in millions)
Coupon rate interest	$	—	$	4.4	$	7.2	$	13.1
Amortized debt discount	—		4.7		8.2		13.8
	$	—	$	9.1	$	15.4	$	26.9

See Note 17 Earnings Per Common Share for an explanation of the effects of the Notes on earnings per share.

The TILC warehouse loan facility, established to finance railcars owned by TILC, had $228.7 million in outstanding borrowings as of September 30, 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 $521.3 million was available as of September 30, 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 3.83% at September 30, 2018. Amounts outstanding at maturity, absent renewal, are payable under the renewed facility in March 2022.

In June 2018, TRL-2018, a Delaware limited liability company and a limited purpose, indirect wholly-owned subsidiary of the Company owned through TILC, issued $482.5 million in Secured Railcar Equipment Notes ("the TRL-2018 Secured Railcar Equipment Notes"). The TRL-2018 Secured Railcar Equipment Notes consisted of two classes of notes with (i) an aggregate principal amount of $200.0 million of TRL-2018's Series 2018-1 Class A-1 Secured Railcar Equipment Notes (the "Class A-1 Notes"), and (ii) an aggregate principal amount of $282.5 million of TRL-2018's Series 2018-1 Class A-2 Secured Railcar Equipment Notes (the “Class A-2 Notes”). The TRL-2018 Secured Railcar Equipment Notes were issued pursuant to a Master Indenture, dated June 20, 2018 between TRL-2018 and Wilmington Trust Company, as indenture trustee. The Class A-1 Notes, of which $195.0 million was outstanding as of September 30, 2018, bear interest at a fixed rate of 3.82%, are payable monthly, and have a stated final maturity date of June 17, 2048. The Class A-2 Notes, of which $282.5 million was outstanding as of September 30, 2018, bear interest at a fixed rate of 4.62%, are payable monthly, and have a stated final maturity date of June 17, 2048. The Notes are obligations of TRL-2018 only, secured by a portfolio of railcars and operating leases thereon acquired and owned by TRL-2018, certain cash reserves, and other assets of TRL-2018.

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 September 30, 2018, are as follows:



	Remaining three months of 2018		2019		2020		2021		2022		Thereafter
	(in millions)
Recourse:
Corporate	$	—	$	0.1	$	0.2	$	0.1	$	—	$	400.0
Leasing – capital lease obligations (Note 6)	1.0		25.5		—		—		—		—
Non-recourse – leasing (Note 6):
2006 secured railcar equipment notes	6.3		28.0		29.8		29.2		29.9		16.2
2009 secured railcar equipment notes	2.0		11.2		6.6		13.4		14.1		114.4
2010 secured railcar equipment notes	2.0		7.6		14.2		20.1		21.0		194.0
2017 promissory notes	3.8		15.1		15.1		15.1		15.1		218.1
2018 secured railcar equipment notes	5.0		20.0		20.0		20.0		20.0		392.5
TILC warehouse facility	1.8		7.3		7.3		7.3		1.2		—
Facility termination payments - TILC warehouse facility	—		—		—		—		203.8		—
TRL 2012 secured railcar equipment notes	6.0		21.9		19.3		19.9		19.6		300.0
TRIP Master Funding secured railcar equipment notes	4.7		23.8		32.9		40.4		41.8		803.3
Total principal payments	$	32.6	$	160.5	$	145.4	$	165.5	$	366.5	$	2,438.5

Subsequent Event

On October 17, 2018, the Leasing Group acquired, from an unrelated seller, the entire equity interest of a railcar leasing entity for $75.4 million in cash. As a result of the purchase transaction, the Leasing Group acquired approximately 4,150 railcars, substantially all of which are currently under lease to third parties, and assumed indebtedness of approximately $283.9 million with maturities ranging from 2018 through 2035. The Company will record the acquired railcars, the attached leases and the assumed debt at fair value in its Consolidated Balance Sheet as of the purchase date.