Trinity Industries reported its wholly-owned subsidiaries, Trinity Industries Leasing (TILC) and Trinity Rail Leasing 2018 (TRL-2018), closed a two-tranche, railcar asset-backed securitization in the aggregate amount of $482.5 million with a blended coupon of approximately 4.41% and a weighted average life of approximately eight years. The transaction is secured by 7,090 railcars, with a fair-market value of $621.6 million and their associated operating leases. The obligations of the equipment notes are non-recourse to Trinity and TILC.

Net proceeds received from the transaction will be used to repay a portion of the conversion settlement value of Trinity’s $449.3 million convertible subordinated notes that were recently called for redemption at par on June 1, 2018. Holders of approximately $448.5 million aggregate principal amount of the notes submitted notices for conversion of their notes prior to the conversion deadline of May 30, 2018. The aggregate settlement amount of the notes submitted for conversion, with settlement dates occurring on various dates between May 30, 2018 and July 3, 2018, cannot be determined at this time; however, the aggregate settlement amount will exceed the net proceeds from the asset-backed securitization.

“We were pleased with the high level of investor interest in the TRL-2018 secured railcar equipment notes offering and our ability to execute the transaction with favorable terms and conditions,” said James E. Perry, senior vice president and chief financial officer for Trinity Industries. “The net proceeds from the issuance facilitates the redemption of our convertible subordinated notes ahead of the company’s planned spin-off of its infrastructure-related businesses in the fourth quarter of 2018.”