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Debt Financing and Credit Facilities
 12 Months Ended
Dec. 31, 2024
Debt Disclosure [Abstract]  
Debt Financing and Credit Facilities

Note 11 – Debt Financing and Credit Facilities

 

Long-term debt consists of the following as of December 31, 2024 and 2023:

 

 

 

December 31,

 

 

December 31,

 

 

 

2024

 

 

2023

 

Revolving line of credit

 

 

-

 

 

 

29,415

 

Term loan

 

 

115,000

 

 

 

-

 

Total debt

 

 

115,000

 

 

 

29,415

 

Less term loan deferred financing costs

 

 

(6,585

)

 

 

-

 

Total debt, net of deferred financing costs

 

 

108,415

 

 

 

29,415

 

Less amounts due within one year

 

 

(2,875

)

 

 

(29,415

)

Long-term debt, net of current portion

 

$

105,540

 

 

$

-

 

 

 

In 2023, the Company terminated the term loan credit agreement by and between FreightCar America Leasing 1, LLC and M&T Bank, N.A., entered into in 2020 (as amended from time to time, the “Term Loan Credit Agreement”) and the revolving credit facility entered into in 2019 for the purpose of financing railcars to be leased to third parties (as amended from time to time, the “M&T Credit Agreement and Forbearance Agreement”). On May 22, 2023, the Company settled $60,178 in-full all of the principal amount of the outstanding Term Loan Credit Agreement, together with all $1,727 accrued unpaid interest, fees, penalties, and other obligations under the Term Loan Credit Agreement through the issuance of Series C Preferred Stock, resulting in a loss on extinguishment of $17,772 for the year ending December 31, 2023. On June 30, 2023, the Company terminated the M&T Credit Agreement and Forbearance Agreement, paying an aggregate of $4,480, which resulted in a gain on extinguishment of $2,892 for the year ended December 31, 2023.

 

As of December 31, 2023, the Company had $29,415 in outstanding debt and remaining availability of $10,853 under a revolving line of credit in the maximum aggregate principal amount of up to $45,000, secured by a standby letter of credit in the principal amount of $25,000 and the Company’s accounts receivable. This facility was terminated and paid in full at its maturity date on December 31, 2024.

 

On December 31, 2024, the Company entered into a term loan agreement by and among the Company, FreightCar North America, LLC and certain subsidiaries of FreightCar North America, LLC, the lenders from time to time party thereto, and Blue Torch Finance LLC, as collateral agent and administrative agent in the principal amount of $115,000 (the “Term Loan”) with a maturity date of December 31, 2028. The Term Loan contains both affirmative and negative covenants, as well as financial covenants, including covenants related to liquidity levels, assessed at any time, and quarterly leverage ratios commencing with the quarter ended March 31, 2025. Proceeds from the Term Loan were used to redeem in full the Preferred Stock (as defined below in Note 13 - Mezzanine Equity). The Company incurred $6,585 in deferred financing costs that are presented as a reduction of the long-term debt balance and amortized to interest expense over the term of the Term Loan.

 

The Term Loan bears interest at the Term SOFR rate, with a floor of 3.00% per annum, plus an applicable margin of 6.00% per annum or at a base rate, as selected by the Company as the borrower. Base rate loans, with respect to the Term Loan, bear interest at the highest of (a) 4.00% per annum, (b) the federal funds rate plus 0.50%, (c) the prime rate or (d) the Term SOFR rate plus 1.00% per annum plus an applicable margin of 5.00%. The Term Loan bears interest at 10.40% as of December 31, 2024.

 

As the Term Loan was issued on December 31, 2024, the fair value of long-term debt approximates its carrying value as of December 31, 2024.

 

Estimated annual maturities of long-term debt, including the current portion as of December 31, 2024 are as follows:

 

2025

 

$

2,875

 

2026

 

 

2,875

 

2027

 

 

2,875

 

2028

 

 

106,375

 

2029

 

 

-

 

Thereafter

 

 

-

 

 

 

$

115,000

 

 

 

On February 12, 2025 (the “ABL Effective Date”), the Company entered into a new revolving credit facility by and among the Company, FreightCar North America, LLC, certain subsidiaries of FreightCar North America, LLC, the lenders from time to time party thereto, and Bank of America, N.A., as agent for the lenders in the form of an asset backed credit facility in the maximum aggregate principal amount of $35,000 (the “ABL”), subject to borrowing base requirements and consisting of revolving loans and a sub-facility for letters of credit. The ABL has a term ending on February 12, 2030, provided that if the aggregate outstanding principal amount and related obligations under the Term Loan have not been repaid in full or prior to October 1, 2028, or refinanced with a new maturity date no earlier than May 13, 2030, the term will end on October 2, 2028.

 

Extensions of credit under the ABL are subject to availability under a borrowing base comprised of various percentages of the value of eligible inventory and accounts receivable, which also serves as collateral for borrowings under the ABL. Borrowing availability was $11,002 as of the ABL Effective Date. The ABL contains both affirmative and negative covenants, as well as certain financial covenants that are triggered if the availability drops below a certain level. These financial covenants remain in effect as long as the

availability stays below that level. Revolving loans outstanding bear interest at the Term SOFR rate plus an applicable margin ranging from 1.50% to 2.00% per annum or at a base rate plus an applicable margin ranging from 0.50% to 1.00% per annum, as selected by the Company as the borrower. Base rate loans, with respect to the ABL, bear interest at the highest of (a) the prime rate, (b) the federal funds rate plus 0.50% or (c) Term SOFR rate plus 1.00%, provided that the base rate may not be less than 1.00%.