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TRINITY INDUSTRIES, INC.

(TRN)
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TRINITY INDUSTRIES INC : Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant (form 8-K)

06/16/2021 | 04:12pm EDT
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant
TRP Notes
On June 15, 2021 (the "Closing Date"), TRP 2021 LLC, a Delaware limited
liability company ("TRP-2021") formerly known as Trinity Rail Leasing 2012 LLC,
issued an aggregate principal amount of (i) $334.0 million of its Series 2021-1
Class A Green Secured Railcar Equipment Notes (the "TRP Class A Notes") and (ii)
$21.0 million of its Series 2021-1 Class B Green Secured Railcar Equipment Notes
(the "TRP Class B Notes") (the TRP Class A Notes and the TRP Class B Notes are,
collectively, the "TRP Notes"). The TRP Notes were issued pursuant to a Master
Indenture, dated as of the Closing Date (the "TRP Indenture") between TRP-2021
and U.S. Bank National Association, as indenture trustee, as supplemented by a
Series 2021-1 Supplement dated as of the Closing Date. The TRP Notes bear
interest at fixed rates as follows: (a) the TRP Class A Notes at 2.07% and (b)
the TRP Class B Notes at 3.06%. The TRP Notes are payable monthly, and have a
stated final maturity date of June 15, 2051.
TRP-2021 is a wholly-owned subsidiary of TRP 2021 Railcar Holdings, LLC ("TRP
Holdings"); TRP Holdings is a wholly-owned subsidiary of RIV 2013 Rail Holdings
LLC ("RIV-2013"); the equity members of RIV-2013 are Trinity Industries Leasing
Company ("TILC") (owner of 30.5% of the equity interests) and other investors;
TILC is a wholly-owned subsidiary of Trinity Industries, Inc. (the "Company").
On the Closing Date, TRP Holdings purchased TRP-2021's Series 2021-1 Class E
Certificates (the "TRP Class E Certificates").
The TRP Notes and the TRP Class E Certificates are obligations of TRP-2021 only.
The TRP Notes and the TRP Class E Certificates are secured by a portfolio of
approximately 6,350 railcars and operating leases thereon already owned by
TRP-2021 (the "TRP Railcar Portfolio") and other assets of TRP-2021.
TRP-2021 used the proceeds from the sale of the TRP Notes to redeem in full each
of its (i) $145.4 million in aggregate principal amount of Series 2012-1 Class
A-1 Secured Railcar Equipment Notes, (ii) $188.4 million in aggregate principal
amount of Series 2012-1 Class A-2 Secured Railcar Equipment Notes, and (iii)
$183.4 million in aggregate principal amount of Series 2013-1 Class A-1 Notes,
of which $22.4 million, $188.4 million, and $137.7 million, respectively, were
outstanding as of March 31, 2021.
Triumph Notes
Also on the Closing Date, Triumph Rail LLC, a Delaware limited liability company
("Triumph Rail"), formerly known as TRIP Rail Master Funding LLC, issued an
aggregate principal amount of (i) $535.0 million of its Series 2021-2 Class A
Green Secured Railcar Equipment Notes (the "Triumph Class A Notes") and (ii)
$25.4 million of its Series 2021-2 Class B Green Secured Railcar Equipment Notes
(the "Triumph Class B Notes") (the Triumph Class A Notes and the Triumph Class B
Notes are, collectively, the "Triumph Notes") (the TRP Notes and the Triumph
Notes are, collectively, the "Notes"). The Triumph Notes were issued pursuant to
a Master Indenture, dated as of the Closing Date (the "Triumph Indenture") (the
TRP Indenture and the Triumph Indenture are, collectively, the "Indentures")
between Triumph Rail and U.S. Bank National Association, as indenture trustee,
as supplemented by a Series 2021-2 Supplement dated as of the Closing Date. The
Triumph Notes bear interest at fixed rates as follows: (a) the Triumph Class A
Notes at 2.15% and (b) the Triumph Class B Notes at 3.08%. The Triumph Notes are
payable monthly, and have a stated final maturity date of June 15, 2051.
Triumph Rail is a wholly-owned subsidiary of Triumph Rail Holdings, LLC
("Triumph Holdings"); Triumph Holdings is a wholly-owned subsidiary of TRIP Rail
Holdings LLC ("TRIP Holdings"); the equity members of TRIP Holdings are TILC
(owner of 42.6% of the equity interests) and other investors. On the Closing
Date, Triumph Holdings purchased Triumph Rail's Series 2021-1 Class E
Certificates (the "Triumph Class E Certificates").
The Triumph Notes and the Triumph Class E Certificates are obligations of
Triumph Rail only. The Triumph Notes and the Triumph Class E Certificates are
secured by a portfolio of approximately 11,004 railcars and operating leases
thereon already owned by Triumph Rail (the "Triumph Railcar Portfolio") (the TRP
Railcar Portfolio and the Triumph Railcar Portfolio are, collectively, the
"Railcar Portfolios") and other assets of Triumph Rail.
Triumph Rail used the proceeds from the sale of the 2021-2 Notes, as well
proceeds from the sale of railcars and related operating leases to its
affiliate, TRIP Railcar Co., LLC ("TRIP Railcar"), to redeem in full each of its
(i) $509.6 million in aggregate principal amount of Series 2011 Class A-2
Secured Railcar Equipment Notes, (ii) $220.7 million in aggregate principal
amount of Series 2014-1 Class A-2 Secured Railcar Equipment Notes, (iii) $103.0
million in aggregate principal amount of Series 2017-1 Class A-1 Secured Railcar
Equipment Notes, and (iv) $134.9 million in aggregate principal amount of Series
2017-1 Class A-2 Notes, of which $508.8 million, $220.7 million, $12.2 million,
and $134.9 million, respectively, were outstanding as of March 31, 2021.
General Discussion for TRP Notes and Triumph Notes
The Notes were offered and sold in private placements 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 occurred outside the United States in reliance on
Regulation S under the Securities Act, pursuant to note purchase agreements as
described in the Company's Form 8-K filed May 5, 2021 (for the TRP Notes) and in
the Company's Form 8-K filed June 1, 2021 (for the Triumph Notes).

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While the stated final maturity of the Notes is June 15, 2051, cash flow from
the assets of TRP-2021 and Triumph Rail will be applied, pursuant to the payment
priorities of their respective Indenture, so as to amortize their respective
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 Indentures, 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 TRP Notes
or the Triumph Notes was to eventually exceed the sum of the depreciated value
of the applicable Railcar Portfolio and the amounts on deposit in certain
accounts of TRP-2021 or Triumph Rail, as applicable. The decision whether to
accelerate or exercise other remedies against TRP-2021 or Triumph Rail and their
respective assets will be under the control of holders representing a majority
of the senior class of the outstanding principal balance of the applicable Notes
issued on the Closing Date together with any subsequent issuances of notes under
the applicable Indenture and, after payment in full of all of such notes,
holders representing a majority of the outstanding principal balance of the TRP
Class E Certificates or Triumph Class E Certificates, as applicable.
As noted above, the TRP Notes and the TRP Class E Certificates are solely the
obligations of TRP-2021 and the Triumph Notes and the Triumph Class E
Certificates are solely the obligations of Triumph Rail. TILC has, however,
entered into certain agreements relating to the management and servicing of
TRP-2021's and Triumph Rail's assets. These agreements contain certain
representations, undertakings and indemnities customary for service providers in
transactions of this type.
Term Loan Agreement
On the Closing Date, TRIP Railcar drew down $329.6 million of the $335.0 million
available under its Term Loan Agreement dated May 18, 2021 (the "Loan
Agreement"), among TRIP Railcar, as borrower, TILC, TRIP Holdings, the lenders
party thereto (the "Lenders"), Credit Suisse AG, New York Branch, as agent for
the Lenders, and U.S. Bank National Association, as collateral agent and
depositary. TRIP Railcar used these proceeds to purchase approximately 6,478
railcars and related operating leases from Triumph Rail. These railcars, their
operating leases, and other assets of TRIP Railcar secure TRIP Railcar's
obligations under the Loan Agreement.

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© Edgar Online, source Glimpses

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