Trinity Industries Inc. filed SEC Form 8-K: Creation of a Direct Financial Obligation, Financial Statements and Exhibits
$TRN
Railroads
Industrials
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
On May 30, 2024, Trinity Rail Leasing 2021 LLC, a Delaware limited liability company (“TRL-2021”) and a limited purpose, indirect wholly-owned subsidiary of Trinity Industries, Inc. (the “Company”), owned by the Company through the Company's direct wholly-owned subsidiary Trinity Industries Leasing Company (“TILC”), issued an aggregate principal amount of $432,430,000 of TRL-2021’s Series 2024-1 Class A Green Secured Railcar Equipment Notes (the “Notes”). The Notes were issued pursuant to a Master Indenture, dated June 30, 2021 (the “Indenture”) between TRL-2021 and U.S. Bank National Association, as indenture trustee, as supplemented by a Series 2024-1 Supplement dated May 30, 2024 (the “Indenture Supplement”). The Notes bear interest at a fixed rate of 5.78%, are payable monthly, and have a stated final maturity date of May 19, 2054.
TRL-2021 previously issued (i) an aggregate principal amount of $305,200,000 of its Series 2021-1 Class A Green Secured Railcar Equipment Notes (the “2021 Class A Notes”) and (ii) an aggregate principal amount of $19,800,000 of its Series 2021-1 Class B Green Secured Railcar Equipment Notes (the “2021 Class B Notes”) (the 2021 Class A Notes and the 2021 Class B Notes are, collectively, the “Existing Notes”) (the “Existing Notes”) under the Indenture.
The Notes are obligations of TRL-2021 only. The Notes and the Existing Notes are secured by a portfolio of railcars and operating leases thereon acquired and owned by TRL-2021 (the “Railcar Portfolio”) and other assets of TRL-2021. The Notes were offered and sold in a private placement solely to qualified institutional buyers in reliance on Rule 144A of the Securities Act of 1933, as amended (the “Securities Act”), and to persons who are not U.S. persons in offers and sales that occur outside the United States in reliance on Regulation S under the Securities Act, pursuant to a note purchase agreement as described in the Company's Form 8-K filed May 23, 2024.
While the stated final maturity of the Notes is May 19, 2054, the cash flows from TRL-2021's assets will be applied, pursuant to the payment priorities of the Indenture, so as to amortize the Notes to achieve monthly targeted principal balances. If the cash flow assumptions used in determining the targeted balances are met, it is anticipated that the Notes will be repaid well in advance of their stated final maturity date. There can be no assurance, however, that such cash flow assumptions will be realized. In addition, the Notes may be subject to acceleration upon the occurrence of certain events of default under the Indenture, including a failure to pay interest on the Notes, and a failure of the Notes to amortize to the extent that, over time, the outstanding principal balance of the Notes together with the Existing Notes were to eventually exceed the sum of the depreciated value of the Railcar Portfolio and the amounts on deposit in certain accounts of TRL-2021. The decision whether to accelerate or exercise other remedies against TRL-2021 and its assets will be under the control of holders representing a majority of the senior class of the outstanding principal balance of the Notes together with the Existing Notes.
TRL-2021 purchased the Railcar Portfolio directly, in multiple tranches, from TILC and from TILC’s affiliates, Trinity Rail Leasing Warehouse Trust (“TRLWT”) and Trinity Rail Leasing VII LLC (“TRL-VII”). Net proceeds received from the railcars acquired in connection with the issuance of the Notes will be used (i) to repay approximately $218.9 million of borrowings under TRLWT’s secured warehouse credit facility, (ii) to redeem an aggregate principal amount of $94,117,281 of TRL-VII’s Series 2009-1 Secured Railcar Equipment Notes, and (iii) for general corporate purposes.
As noted above, the Notes are solely the obligations of TRL-2021. TILC has, however, entered into certain agreements relating to the transfer of the Railcar Portfolio to TRL-2021 and the management and servicing of TRL-2021's assets. These agreements contain certain representations, undertakings and indemnities customary for asset sellers and service providers in transactions of this type.
The Indenture was filed as Exhibit 10.5.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2021, and is incorporated by reference. A copy of the Indenture Supplement is attached as Exhibit 10.1 hereto and is incorporated by reference. The description of the Indenture and the Indenture Supplement contained herein does not purport to be complete and is qualified in its entirety by the full text of the relevant exhibit.
Item 9.01 Financial Statements and Exhibits.
(a) - (c) Not applicable.
(d) Exhibits:
| NO. | DESCRIPTION | |||||||
| 10.1 | ||||||||
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document (filed electronically herewith). | |||||||
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document (filed electronically herewith). | |||||||
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document (filed electronically herewith). | |||||||
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). | |||||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Trinity Industries, Inc. | ||||||||
| June 4, 2024 | By: | /s/ Eric R. Marchetto | ||||||
| Name: Eric R. Marchetto | ||||||||
| Title: Executive Vice President and Chief Financial Officer | ||||||||