FreightCar America, Inc. Announces New $35 Million Asset-Based Lending Credit Facility
FreightCar America (NASDAQ: RAIL) has secured a new $35 million Asset-Based Lending (ABL) credit facility with Bank of America. The facility features a maturity period of 4 years and 9 months and offers a reduced interest rate of SOFR + 175, resulting in approximately 35% lower borrowing costs compared to the previous ABL facility.
The new credit agreement aims to optimize working capital needs and enhance financial flexibility to support the company's ongoing growth and strategic initiatives. This development represents a significant step in FreightCar America's comprehensive refinancing efforts.
FreightCar America (NASDAQ: RAIL) ha ottenuto una nuova linea di credito basata su asset (ABL) di 35 milioni di dollari con Bank of America. La linea prevede un periodo di scadenza di 4 anni e 9 mesi e offre un tasso di interesse ridotto di SOFR + 175, con un costo di prestito inferiore di circa il 35% rispetto alla precedente linea ABL.
Il nuovo accordo di credito mira a ottimizzare le esigenze di capitale circolante e a migliorare la flessibilità finanziaria per supportare la crescita continua dell'azienda e le sue iniziative strategiche. Questo sviluppo rappresenta un passo significativo negli sforzi complessivi di rifinanziamento di FreightCar America.
FreightCar America (NASDAQ: RAIL) ha asegurado una nueva línea de crédito basada en activos (ABL) de 35 millones de dólares con Bank of America. La línea tiene un período de vencimiento de 4 años y 9 meses y ofrece una tasa de interés reducida de SOFR + 175, lo que resulta en costos de endeudamiento aproximadamente un 35% más bajos en comparación con la línea ABL anterior.
El nuevo acuerdo de crédito tiene como objetivo optimizar las necesidades de capital de trabajo y mejorar la flexibilidad financiera para apoyar el crecimiento continuo de la empresa y sus iniciativas estratégicas. Este desarrollo representa un paso significativo en los esfuerzos de refinanciamiento integral de FreightCar America.
프레이트카 아메리카 (NASDAQ: RAIL)는 뱅크 오브 아메리카와 3,500만 달러 규모의 자산 기반 대출(ABL) 신용 시설을 확보했습니다. 이 시설은 만기 기간이 4년 9개월이며, SOFR + 175의 저금리 혜택을 제공하여 이전 ABL 시설에 비해 약 35% 낮은 차입 비용을 자랑합니다.
새로운 신용 계약은 운전 자본 필요성을 최적화하고 회사의 지속적인 성장 및 전략적 이니셔티브를 지원하기 위한 재정적 유연성을 강화하는 것을 목표로 합니다. 이번 발전은 프레이트카 아메리카의 종합적인 재융자 노력에 있어 중요한 진전을 나타냅니다.
FreightCar America (NASDAQ: RAIL) a obtenu une nouvelle ligne de crédit basée sur des actifs (ABL) de 35 millions de dollars auprès de Bank of America. La ligne présente une période d'échéance de 4 ans et 9 mois et propose un taux d'intérêt réduit de SOFR + 175, entraînant des coûts d'emprunt environ 35% inférieurs par rapport à l'ancienne ligne ABL.
Le nouvel accord de crédit vise à optimiser les besoins en fonds de roulement et à améliorer la flexibilité financière pour soutenir la croissance continue de l'entreprise et ses initiatives stratégiques. Ce développement représente une étape significative dans les efforts de refinancement globaux de FreightCar America.
FreightCar America (NASDAQ: RAIL) hat eine neue kreditbasierte Finanzierung (ABL) in Höhe von 35 Millionen US-Dollar bei der Bank of America gesichert. Die Finanzierung hat eine Laufzeit von 4 Jahren und 9 Monaten und bietet einen reduzierten Zinssatz von SOFR + 175, was zu etwa 35% niedrigeren Kreditkosten im Vergleich zur vorherigen ABL-Finanzierung führt.
Der neue Kreditvertrag zielt darauf ab, den Bedarf an Betriebskapital zu optimieren und die finanzielle Flexibilität zu erhöhen, um das kontinuierliche Wachstum des Unternehmens und seine strategischen Initiativen zu unterstützen. Diese Entwicklung stellt einen bedeutenden Schritt in den umfassenden Refinanzierungsbemühungen von FreightCar America dar.
- Secured new $35 million ABL credit facility
- 35% reduction in borrowing costs compared to previous facility
- Extended maturity period of 4 years and 9 months
- Enhanced working capital flexibility
- None.
Insights
The new $35 million ABL credit facility marks a strategic enhancement to FreightCar America's financial structure, with three key advantages that significantly strengthen its market position:
First, the 35% reduction in borrowing costs through the SOFR + 175 basis points rate structure will directly improve profitability metrics. For context, this reduction in interest expense could translate into meaningful cash flow improvements, particularly important in the capital-intensive railroad manufacturing sector where working capital management is paramount.
Second, securing this facility with Bank of America represents a notable upgrade in banking relationships. Top-tier banks typically impose stringent qualifying criteria, suggesting FreightCar America's underlying business fundamentals and credit metrics have improved substantially. This enhanced credibility could facilitate better terms with suppliers and customers.
Third, the nearly 5-year maturity provides extended visibility on capital availability, important for long-term planning in an industry characterized by multi-year order cycles and significant working capital requirements. This stability enables FreightCar America to pursue larger contracts and strategic initiatives without immediate refinancing concerns.
The timing of this refinancing is particularly strategic, as it positions the company to capitalize on potential growth opportunities in the railroad equipment market while maintaining financial flexibility. The optimized cost structure and extended maturity suggest a forward-looking approach to capital management that could enhance competitive advantages in contract bidding and operational execution.
Expanded credit facility enhances borrowing capacity and reduces cost of capital
Further enhances financial flexibility and ability to support growth strategy
CHICAGO, Feb. 18, 2025 (GLOBE NEWSWIRE) -- FreightCar America, Inc. (NASDAQ: RAIL) (“FreightCar America” or the “Company”), a diversified manufacturer and supplier of railroad freight cars, railcar parts and components, today closed a new Asset-Based Lending (“ABL”) credit facility with Bank of America. The new ABL credit agreement will provide FreightCar America with a
Highlights
- The Company secured a new
$35 million ABL credit facility with Bank of America - New facility structured with a maturity of 4 years and 9 months from the closing date
- Provides a lower interest rate of SOFR + 175, reducing credit facility borrowing costs by approximately
35% compared to the Company’s previous ABL credit facility - The facility will provide financial flexibility to support ongoing growth and strategic initiatives
Michael Riordan, Chief Financial Officer of FreightCar America, commented, “We are excited to partner with Bank of America to announce the closing of a new ABL revolving credit facility. This agreement marks another important step in our comprehensive refinancing efforts, which enhances our ability to manage working capital needs and optimize our borrowing costs.”
For additional information about the Company’s update, please refer to the Company’s Form 8-K filed today with the Securities and Exchange Commission.
About FreightCar America
FreightCar America, headquartered in Chicago, Illinois, is a leading designer, producer and supplier of railroad freight cars, railcar parts and components. We also specialize in railcar repairs, complete railcar rebody services and railcar conversions that repurpose idled rail assets back into revenue service. Since 1901, our customers have trusted us to build quality railcars that are critical to economic growth and instrumental to the North American supply chain. To learn more about FreightCar America, visit www.freightcaramerica.com.
Forward-Looking Statements
This press release contains statements relating to our expected financial performance, financial condition, and/or future business prospects, events and/or plans that are “forward-looking statements” as defined under the Private Securities Litigation Reform Act of 1995. Forward-looking statements represent our estimates and assumptions only as of the date of this press release. Our actual results may differ materially from the results described in or anticipated by our forward-looking statements due to certain risks and uncertainties. These potential risks and uncertainties relate to, among other things, the cyclical nature of our business; adverse economic and market conditions, including inflation; material disruption in the movement of rail traffic for deliveries; fluctuating costs of raw materials, including steel and aluminum; delays in the delivery of raw materials; our ability to maintain relationships with our suppliers of railcar components; our reliance upon a small number of customers that represent a large percentage of our sales; the variable purchase patterns of our customers and the timing of completion; delivery and customer acceptance of orders; the highly competitive nature of our industry; the risk of lack of acceptance of our new railcar offerings; potential unexpected changes in laws, rules, and regulatory requirements, including tariffs and trade barriers; and other competitive factors. The factors listed above are not exhaustive. New factors emerge from time to time that may cause our business not to develop as we expect, and it is not possible for us to predict all of them. We expressly disclaim any duty to provide updates to any forward-looking statements made in this press release, whether as a result of new information, future events or otherwise.
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FAQ
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