Union Bank, ING Arrange $500MM Term Loan
Textainer Group Holdings 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 as arranger and ING Belgium as joint lead arranger and joint bookrunner.
The financial institutions also include ABN Amro Capital, BB&T Capital Markets, BNP Paribas, BBVA Compass Bank, Credit Industriel et Commercial, DBS Bank, HSBC Bank USA, Santander Bank and Wells Fargo Bank.
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.
The interest rate under the term loan is a spread over the London Interbank Offered Rate 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.
Hilliard C. Terry, III, Textainer EVP and CFO, commented, “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.”