Trencor's Textainer completes US$500 million term loan and announces redemption of asset-backed term note
(Incorporated in the Republic of South Africa)
(Registration No 1955/002869/06)
Share Code: TRE
TRENCOR'S TEXTAINER COMPLETES US$500 MILLION TERM LOAN AND ANNOUNCES REDEMPTION OF ASSET-BACKED TERM NOTES
We draw attention to the following news release issued by Textainer Group Holdings Limited, in which Trencor has a 48,2% beneficiary interest:
"Hamilton, Bermuda - (Business Wire) - May 1, 2014 - Textainer Group Holdings Limited (NYSE: TGH) ("Textainer" or the "Company"), the world's largest lessor of intermodal containers based on fleet size, today announced that Textainer Limited, which is a wholly-owned subsidiary of the Company, will be entering into a $500 million, five- year term loan with a group of financial institutions led by Union Bank, N.A. as Arranger and ING Belgium SA/NV as Joint Lead Arranger and Joint Bookrunner and including ABN Amro Capital USA LLC; BB&T Capital Markets; BNP Paribas; BBVA Compass Bank; Credit Industriel et Commercial; DBS Bank Ltd.; HSBC Bank USA, N.A.; Santander Bank, N.A.; and Wells Fargo Bank, N.A.
The interest rate under the term loan is a spread over the London Interbank Offered Rate ("LIBOR") which varies based on leverage. At the closing, the initial interest rate will be LIBOR plus 150 basis points. Including the cost of interest rate hedging for this facility and with consistent corporate leverage, the Company anticipates an effective annual interest rate of less than three percent for the term loans drawn under this facility. The term loan partially amortizes and remaining principal is due in full in five years. The proceeds from borrowings under the credit agreement are expected to be used to purchase containers and for general corporate purposes, including the redemption of debt.
Textainer Limited's wholly-owned subsidiary, Textainer Marine Containers Limited ("TMCL") also announced that it has called for full redemption its three outstanding series of asset-backed term notes with aggregate unpaid principal of $662 million. The redemption will occur at par on May 15. Proceeds from the term loan, Textainer Limited's working capital and borrowings from other debt facilities will fund the redemption of the TMCL notes.
"This new term loan and redemption of the TMCL notes will lower Textainer's funding costs and free up cash for additional container investments," commented Hilliard C. Terry, III, Textainer Executive Vice President and Chief Financial Officer, "The closing of these transactions mark the completion of a multi-year plan to restructure the Company's financing facilities which included: establishing a new series allocation trust, creating a financing facility for older containers, and terminating TMCL, our oldest and least flexible financing entity. All of these actions serve to provide Textainer more financial flexibility, enabling us to better meet our customers' container needs."
"We appreciate the participation of new and existing banks and believe this is a clear indication of their confidence in our business model, disciplined operating philosophy and growth opportunities," concluded Mr. Terry.
Textainer Group Holdings Limited
Hilliard C. Terry, III, +1 415-658-8214
Executive Vice President and Chief Financial Officer
Trencor Services (Pty) Ltd
2 May 2014
RAND MERCHANT BANK (A division of FirstRand Bank Limited)