Trinity Industries Inc. (NYSE:TRN) Successfully Completes $1.1 Billion Railcar Leasing Joint Venture Deal
Northern, WI 05/21/2014 (gdpwatch) – The leading American company Trinity Industries Inc. (NYSE:TRN) made an announcement about successful completion of Railcar Leasing Joint Venture Deal worth $1.1 billion.
According to the company, a sister concern of TRIP Rail Holdings LLC acquired a portfolio of already leased railcars from Trinity Industries Leasing Company. The estimated value of the portfolio was $388 million. Please note that the transaction was completed in two phases. Initial $336 million worth of funds were arranged by a securitization backed by the assets of Trinity Industries Inc. (NYSE:TRN). All the funds were long terms and backed by the assets of the company. The remaining amount was paid in the form of equity shares of both the owners of TRIP.
TRIP is a subsidiary of TILC and Napier Park Railcar Lease Fund LLC. TILC owns 42% stake in the company, while the rest of the stake is owned by Napier Park Railcar Lease Fund LLC.
RIV Rail Holdings LLC and TRIP have purchased around $1.1 billion of leased railcars since May 2013 from TILC and its sister concern firms. The 31% stake of RIV 2013 is owned by TILC. The companies involved in $1.1 billion worth transaction used the entire equity capital which was left after the formation of RIV in the previous year.
Please note that the asset backed securities of Trinity Industries Inc. (NYSE:TRN) have around 8.2 years of weighted average life with the coupon rate of 3.8%, payable at the end of the term. A sister concern of TRIP issued the debt securities. Please note that the obligations are non-recourse to all three: TRIP, TILC, and Trinity. The management of the company expects that at least $370 million worth of funds will be generated through the transaction. Everyone will come to know in a short span of time if the transaction proves to be beneficial for the company or not.