Debt

3 Months Ended

Mar. 31, 2023

Debt Disclosure [Abstract]

Debt

Debt

The carrying amounts of our debt are as follows:

	March 31, 2023		December 31, 2022
	(in millions)
Corporate – Recourse:
Revolving credit facility	$	305.0	$	225.0
Senior notes, net of unamortized discount of $0.1 and $0.1	399.9		399.9
	704.9		624.9
Less: unamortized debt issuance costs	(0.6)		(0.8)
Total recourse debt	704.3		624.1
Leasing – Non-recourse:
Wholly-owned subsidiaries:
Secured railcar equipment notes, net of unamortized discount of $0.4 and $0.3	2,344.9		2,384.0
2017 promissory notes, net of unamortized discount of $5.1 and $5.6	705.4		716.0
TILC warehouse facility	796.2		721.8
	3,846.5		3,821.8
Less: unamortized debt issuance costs	(19.6)		(21.1)
	3,826.9		3,800.7
Partially-owned subsidiaries:
Secured railcar equipment notes, net of unamortized discount of $0.3 and $0.3	1,185.6		1,192.6
Less: unamortized debt issuance costs	(9.2)		(9.8)
	1,176.4		1,182.8
Total non–recourse debt	5,003.3		4,983.5
Total debt	$	5,707.6	$	5,607.6

Estimated Fair Value of Debt – The estimated fair value of our 4.55% senior notes due 2024 ("Senior Notes") is based on a quoted market price in a market with little activity (Level 2 input). The estimated fair values of our secured railcar equipment notes are based on our estimate of their fair value using unobservable input values provided by a third party (Level 3 inputs). The respective carrying values of our revolving credit facility, 2017 promissory notes and TILC warehouse facility approximate fair value because the interest rate adjusts to the market interest rate. The estimated fair values of our debt are as follows:

	March 31, 2023		December 31, 2022
	(in millions)
Level 1	$	1,806.6	$	1,662.8
Level 2	389.8		387.5
Level 3	3,217.8		3,194.0
	$	5,414.2	$	5,244.3

Revolving Credit Facility – We have a $600.0 million unsecured corporate revolving credit facility. In March 2023, we amended our revolving credit facility to increase the total facility commitment from $450.0 million to $600.0 million, increase the maximum leverage ratio to provide additional flexibility, modify the limitations on restricted payments, and allow up to $100.0 million of annual dividends on the Company's common stock. We incurred $0.5 million in costs related to the amendment, which will be amortized to interest expense through the maturity date. The maturity date for the revolving credit facility is the earlier of (i) July 25, 2027 or (ii) July 2, 2024 if our Senior Notes have not been repaid in full by that date.

During the three months ended March 31, 2023, we had total borrowings of $155.0 million and total repayments of $75.0 million under the revolving credit facility. Additionally, we had outstanding letters of credit issued in an aggregate amount of $16.8 million, leaving $278.2 million available for borrowing as of March 31, 2023. The majority of our outstanding letters of credit as of March 31, 2023 are scheduled to expire in October 2023. Our letters of credit obligations support performance bonds related to certain railcar orders. The revolving credit facility bears interest at a variable rate of the Secured Overnight Financing Rate ("SOFR") plus (1) a benchmark adjustment of 10 basis points and (2) a facility margin of 1.75%, for an all-in interest rate of 6.69% as of March 31, 2023. A commitment fee accrues on the average daily unused portion of the revolving credit facility at the rate of 0.175% to 0.40% (0.25% as of March 31, 2023).

The 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, 2023, we were in compliance with all such financial covenants.

TILC Warehouse Loan Facility – TILC has a $1.0 billion warehouse loan facility, which was established to finance railcars owned by TILC. During the three months ended March 31, 2023, we had total borrowings of $91.8 million and total repayments of $17.4 million under the TILC warehouse loan facility. Of the remaining unused facility amount of $203.8 million, $91.4 million was available as of March 31, 2023 based on the amount of warehouse-eligible, unpledged equipment. Advances under the facility bear interest at one-month term SOFR plus (1) a benchmark adjustment of 11 basis points and (2) a facility margin of 185 basis points, for an all-in interest rate of 6.63% at March 31, 2023.

TRL-2017 SOFR Transition – In February 2023, we amended the Amended and Restated Loan Agreement and the Trinity Rail Leasing 2017, LLC ("TRL-2017") interest rate swap agreements to transition the benchmark rate from LIBOR to SOFR plus a benchmark adjustment. The Company has elected to apply the optional accounting expedient under ASC 848, Reference Rate Reform, for hedging relationships affected by reference rate reform.

Terms and conditions of our other long-term debt, including recourse and non-recourse provisions and scheduled maturities, are described in Note 8 of our 2022 Annual Report on Form 10-K.