Textainer Marine Containers VII Limited (TMCL VII), an indirect, wholly-owned subsidiary of Textainer, priced a new debt offering of $651 million of fixed-rate asset-backed notes, comprised of $605 million in Class A notes and $46 million in Class B notes.

When issued, the notes will have a fixed coupon with a weighted average effective annual interest rate of 2.29% and a weighted average life of approximately five years. The notes will be secured by a pledge of TMCL VII’s assets. When issued, the Class A and Class B notes are expected to be rated A(sf) and BBB(sf), respectively, by Standard & Poor’s. The related closing is expected to occur on April 20.

Once closed, approximately $300 million of the issuance proceeds will be used to repay in full the remaining TMCL VII 2019-1 notes, which have a weighted average effective annual interest rate of 4.06%. The balance will be used to pay down bank facility debt, which in turn is intended to lower overall borrowing costs, free up bank facility capacity for additional container investments and increase the fixed rate portion of Textainer’s overall debt.

Textainer is a lessor of intermodal containers with approximately 3.8 million TEU in its owned and managed fleet.