Textainer Announces Early Redemption of $208 million Secured Term Loans

Rhea-AI Summary

Textainer Group Holdings Limited (NYSE:TGH) announced the early redemption of approximately $208 million in senior secured term loans, originally due in February 2025. The company incurred an $11 million make-whole payment and a $1 million write-off of unamortized debt issuance costs as part of this redemption. By utilizing borrowings from lower-priced debt facilities, Textainer aims to optimize its financing and reduce its effective interest rate, with expected future savings from the make-whole payment.

Positive

• Early redemption of $208 million in secured term loans enhances financial flexibility.
• Reduction of future effective interest rate by replacing high-interest loans with lower-priced debt facilities.
• Expected recovery of make-whole payment through future interest savings.

Negative

• Incurred $11 million make-whole payment due to early loan redemption.
• Write-off of $1 million in unamortized debt issuance costs.

HAMILTON, Bermuda, Aug. 20, 2021 /PRNewswire/ -- Textainer Group Holdings Limited (NYSE:TGH; JSE: TXT) ("Textainer", "we", and "our"), one of the world's largest lessors of intermodal containers, today announced that Textainer Marine Containers VI Limited ("TMCL VI"), an indirect, wholly-owned subsidiary of the Company, has redeemed approximately $208 million in aggregate principal outstanding of senior secured term loans ("term loans") with an average interest rate of 4.30% and an original scheduled maturity in February 2025.

In accordance with the early redemption provisions of the term loans, Textainer made a make-whole payment of approximately $11 million. Additionally, we incurred a write-off of unamortized debt issuance costs of approximately $1 million. The make-whole payment and write-off will be recognized in our third quarter earnings, but will be excluded from our third quarter adjusted net income. Textainer used borrowings under our lower-priced existing debt facilities to pay for the outstanding principal of the term loans and the make-whole payment.

"The early redemption of these notes will help us further optimize our financing platform. Furthermore, we are also able to decrease our future effective interest rate by replacing the $208 million 4.30% term loans with our lower-priced debt facilities. We expect to more than fully recover the make-whole payment of this redemption through future interest savings," commented Michael K. Chan, Textainer Executive Vice President and Chief Financial Officer. 

About Textainer Group Holdings Limited

Textainer has operated since 1979 and is one of the world's largest lessors of intermodal containers with approximately 4.1 million TEU in our owned and managed fleet. We lease containers to approximately 250 customers, including all of the world's leading international shipping lines, and other lessees. Our fleet consists of standard dry freight, refrigerated intermodal containers, and dry freight specials, and we are one of the largest and most reliable suppliers of new and used containers. Textainer operates via a network of 14 offices and approximately 400 independent depots worldwide. Textainer has a primary listing on the New York Stock Exchange (NYSE: TGH) and a secondary listing on the Johannesburg Stock Exchange (JSE: TXT).

Important Cautionary Information Regarding Forward-Looking Statements

This press release contains forward-looking statements within the meaning of U.S. securities laws. Forward-looking statements include statements that are not statements of historical facts and include, without limitation, statements regarding: the expected decrease in our overall effective interest rate and expected recovery of the make-whole payment.  Readers are cautioned that these forward-looking statements involve risks and uncertainties, are only predictions and may differ materially from actual future events or results. For a discussion of some of these risks and uncertainties, see Item 3 "Key Information— Risk Factors" in Textainer's Annual Report on Form 20-F filed with the Securities and Exchange Commission on March 18, 2021 and the risks described in the section entitled "Risk Factors" in the prospectus supplement related to the offering of the depositary shares.

Textainer's views, estimates, plans and outlook as described within this document may change subsequent to the release of this press release. Textainer is under no obligation to modify or update any or all of the statements it has made herein despite any subsequent changes Textainer may make in its views, estimates, plans or outlook for the future.

Contact Information
Investor Relations
+1 415-658-8333
ir@textainer.com

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SOURCE Textainer Group Holdings Limited

FAQ

What was the amount of senior secured term loans redeemed by Textainer (TGH)?

Textainer redeemed approximately $208 million in senior secured term loans.

What is the average interest rate of the redeemed loans by Textainer (TGH)?

The redeemed loans had an average interest rate of 4.30%.

What are the financial implications of Textainer's (TGH) early loan redemption?

The early redemption is expected to decrease Textainer's future effective interest rate and save on future interest payments.

What costs did Textainer (TGH) incur during the loan redemption process?

Textainer incurred an $11 million make-whole payment and a $1 million write-off on unamortized debt issuance costs.