Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant TRP Notes OnJune 15, 2021 (the "Closing Date"), TRP 2021 LLC, aDelaware limited liability company ("TRP-2021") formerly known asTrinity 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 ClassB Notes ") (the TRP Class A Notes and the TRP ClassB 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") betweenTRP-2021 andU.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 ClassB Notes at 3.06%. The TRP Notes are payable monthly, and have a stated final maturity date ofJune 15, 2051 . TRP-2021 is a wholly-owned subsidiary of TRP 2021Railcar Holdings, LLC ("TRP Holdings ");TRP Holdings is a wholly-owned subsidiary of RIV 2013Rail Holdings LLC ("RIV-2013"); the equity members of RIV-2013 areTrinity Industries Leasing Company ("TILC") (owner of 30.5% of the equity interests) and other investors; TILC is a wholly-owned subsidiary ofTrinity Industries, Inc. (the "Company"). On the Closing Date,TRP Holdings purchased TRP-2021's Series 2021-1 ClassE Certificates (the "TRP ClassE Certificates "). The TRP Notes and the TRP ClassE Certificates are obligations of TRP-2021 only. The TRP Notes and the TRP ClassE 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 ofMarch 31, 2021 . Triumph Notes Also on the Closing Date,Triumph Rail LLC , aDelaware limited liability company ("Triumph Rail"), formerly known asTRIP 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 andU.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 ofJune 15, 2051 . Triumph Rail is a wholly-owned subsidiary ofTriumph Rail Holdings, LLC ("Triumph Holdings ");Triumph Holdings is a wholly-owned subsidiary ofTRIP Rail Holdings LLC ("TRIP Holdings "); the equity members ofTRIP 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 ClassE 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 ofMarch 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 notU.S. persons in offers and sales that occurred outsidethe 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 filedMay 5, 2021 (for the TRP Notes) and in the Company's Form 8-K filedJune 1, 2021 (for the Triumph Notes). -------------------------------------------------------------------------------- While the stated final maturity of the Notes isJune 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 ClassE Certificates or Triumph Class E Certificates, as applicable. As noted above, the TRP Notes and the TRP ClassE 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 datedMay 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, andU.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.
--------------------------------------------------------------------------------
© Edgar Online, source