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Debt | 9 Months Ended
--- | ---
Sep. 30, 2023
Debt Disclosure [Abstract] |
Debt | Debt The carrying amounts of our debt are as follows:
| September 30, 2023 |  | December 31, 2022
| (in millions)
Corporate – Recourse: |  |  |
Revolving credit facility | $ | — |  |  | $ | 225.0 |
Senior notes due 2024, net of unamortized discount of $0.1 and $0.1 | 399.9 |  |  | 399.9 |
Senior notes due 2028 | 400.0 |  |  | — |
| 799.9 |  |  | 624.9 |
Less: unamortized debt issuance costs | (5.7) |  |  | (0.8) |
Total recourse debt | 794.2 |  |  | 624.1 |
Leasing – Non-recourse: |  |  |
Wholly-owned subsidiaries: |  |  |
Secured railcar equipment notes, net of unamortized discount of $0.3 and $0.3 | 2,279.8 |  |  | 2,384.0 |
2017 promissory notes, net of unamortized discount of $4.0 and $5.6 | 684.3 |  |  | 716.0 |
TRL-2023 term loan | 337.2 |  |  | — |
TILC warehouse facility | 555.9 |  |  | 721.8 |
| 3,857.2 |  |  | 3,821.8 |
Less: unamortized debt issuance costs | (18.9) |  |  | (21.1) |
| 3,838.3 |  |  | 3,800.7 |
Partially-owned subsidiaries: |  |  |
Secured railcar equipment notes, net of unamortized discount of $0.2 and $0.3 | 1,157.9 |  |  | 1,192.6 |
Less: unamortized debt issuance costs | (8.0) |  |  | (9.8) |
| 1,149.9 |  |  | 1,182.8 |
Total non–recourse debt | 4,988.2 |  |  | 4,983.5 |
Total debt | $ | 5,782.4 |  |  | $ | 5,607.6 |
Estimated Fair Value of Debt – The estimated fair values of our 7.75% senior notes due 2028 ("Senior Notes due 2028") and our 4.55% senior notes due 2024 ("Senior Notes due 2024") are based on a quoted market price in a market with little activity (Level 2 input). The estimated fair values of our secured railcar equipment notes are based on our estimate of their fair value using unobservable input values provided by a third party (Level 3 inputs). The respective carrying values of our revolving credit facility, 2017 promissory notes, TRL-2023 term loan, and TILC warehouse facility approximate fair value because the interest rate adjusts to the market interest rate. The estimated fair values of our debt are as follows:
| September 30, 2023 |  | December 31, 2022
| (in millions)
Level 2 | $ | 793.4 |  |  | $ | 387.5 |
Level 3 | $ | 3,098.7 |  |  | $ | 3,194.0 |
Revolving Credit Facility – We have a $600.0 million unsecured corporate revolving credit facility. In March 2023, we amended our revolving credit facility to increase the total facility commitment from $450.0 million to $600.0 million, increase the maximum leverage ratio to provide additional flexibility, modify the limitations on restricted payments, and allow up to $100.0 million of annual dividends on the Company's common stock. We incurred $0.7 million in costs related to the amendment, which will be amortized to interest expense through the maturity date. The maturity date for the revolving credit facility is the earlier of (i) July 25, 2027 or (ii) July 2, 2024 if our Senior Notes due 2024 have not been repaid in full by that date. During the nine months ended September 30, 2023, we had total borrowings of $435.0 million and total repayments of $660.0 million under the revolving credit facility. Additionally, we had outstanding letters of credit issued in an aggregate amount of $15.9 million. Of the $584.1 million remaining unused amount, $561.2 million was available for borrowing as of September 30, 2023. The majority of our outstanding letters of credit as of September 30, 2023 are scheduled to expire in October 2024. Our letters of credit obligations support performance bonds related to certain railcar orders. The revolving credit facility bears interest at a variable rate of SOFR plus (1) a benchmark adjustment of 10 basis points and (2) a facility margin of 1.75%, for an all-in interest rate of 7.16% as of September 30, 2023. A commitment fee accrues on the average daily unused portion of the revolving credit facility at the rate of 0.175% to 0.40% (0.25% as of September 30, 2023). The revolving credit facility requires the maintenance of ratios related to minimum interest coverage for the leasing and manufacturing operations and maximum leverage. As of September 30, 2023, we were in compliance with all such financial covenants. Senior Notes Due 2028 – In June 2023, we issued $400.0 million aggregate principal amount of 7.75% senior notes due July 2028. These notes were issued through a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and outside the United States to non-U.S. persons pursuant to Regulation S under the Securities Act. Interest on the Senior Notes due 2028 is payable semiannually commencing January 15, 2024. The Senior Notes due 2028 rank senior to existing and future subordinated debt and rank equal to existing and future senior indebtedness, including our Senior Notes due 2024 and our revolving credit facility. The Senior Notes due 2028 are subordinated to all our existing and future secured debt to the extent of the value of the collateral securing such indebtedness. The Senior Notes due 2028 contain covenants that limit our ability and/or certain subsidiaries' ability to create or permit to exist certain liens; enter into sale and leaseback transactions; and consolidate, merge, or transfer all or substantially all of our assets. Our Senior Notes due 2028 are fully and unconditionally and jointly and severally guaranteed by each of our domestic subsidiaries that is a guarantor under our revolving credit facility. We incurred $5.5 million in debt issuance costs, which will be amortized to interest expense over the term of the Senior Notes due 2028. Net proceeds received from the issuance were used to repay outstanding borrowings under our revolving credit facility and to pay related fees, costs, premiums, and expenses in connection with the issuance. We intend to use the remainder of the net proceeds for general corporate purposes, which may include repayment of other debt, including the Senior Notes due 2024. TILC Warehouse Loan Facility – TILC has a $1.0 billion warehouse loan facility, which was established to finance railcars owned by TILC. During the nine months ended September 30, 2023, we had total borrowings of $277.9 million and total repayments of $443.8 million under the TILC warehouse loan facility. Of the remaining unused facility amount of $444.1 million, $104.8 million was available as of September 30, 2023 based on the amount of warehouse-eligible, unpledged equipment. Advances under the facility bear interest at one-month term SOFR plus (1) a benchmark adjustment of 11 basis points and (2) a facility margin of 1.85%, for an all-in interest rate of 7.29% at September 30, 2023. TRL-2017 SOFR Transition – In February 2023, we amended the Amended and Restated Loan Agreement and the Trinity Rail Leasing 2017, LLC ("TRL-2017") interest rate swap agreements to transition the benchmark rate from LIBOR to one-month term SOFR plus a benchmark adjustment. The Company has elected to apply the optional accounting expedient under ASC 848, Reference Rate Reform, for hedging relationships affected by reference rate reform. TRL-2023 Term Loan – In June 2023, TRL-2023 entered into a $340.0 million term loan agreement. The TRL-2023 term loan was established to finance railcars and related operating leases thereon purchased by TRL-2023 from TILC and TILC's warehouse loan facility. The TRL-2023 term loan bears interest at a variable rate of daily simple SOFR plus (1) a benchmark adjustment of 10 basis points and (2) a facility margin of 1.80%, for an all-in interest rate of 7.21% as of September 30, 2023. The TRL-2023 term loan has a stated maturity date of June 12, 2028. We incurred $2.2 million in debt issuance costs, which will be amortized to interest expense over the term of the TRL-2023 term loan. The TRL-2023 term loan is an obligation of TRL-2023 and is non-recourse to Trinity. The obligation is secured by a portfolio of railcars and operating leases thereon, certain cash reserves, and other assets to be acquired and owned by TRL-2023. Net proceeds received from the transaction were used to repay approximately $300.1 million of borrowings under TILC's warehouse loan facility and for general corporate purposes. Terms and conditions of our other debt, including recourse and non-recourse provisions and scheduled maturities, are described in Note 8 of our 2022 Annual Report on Form 10-K.

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