Item 1.01. Entry into a Material Definitive Agreement.
Amended Term Loan Facility and Revolving Credit Facility
On October 14, 2021, Triton International Limited ("Triton" or the "Company") and its wholly-owned subsidiaries Triton Container International Limited ("TCIL") and TAL International Container Corporation ("TALICC" and, together with TCIL and Triton, the "Loan Parties"), entered into (a) an Amended and Restated Term Loan Agreement among PNC Bank, National Association, as administrative agent, and various lenders party thereto (the "Amended Term Loan Facility"), which amends and restates TCIL's existing $1.2 billion term loan facility entered into on May 27, 2021 (the "Existing Term Loan Agreement") and (b) an Eleventh Restated and Amended Credit Agreement among Bank of America, N.A., as administrative agent, and various lenders party thereto (the "Amended Revolving Credit Facility" and, together with the Amended Term Loan Facility, the "Amended Credit Facilities"), which amends and restates TCIL's and TALICC's existing $1.125 billion revolving credit facility entered into on May 16, 2019 (the "Existing Revolving Credit Agreement").
TCIL, in its capacity as the lead borrower, (i) may request up to four (4) borrowings under the Amended Term Loan Facility, during the period ending on November 24, 2021, in a total aggregate maximum amount not to exceed $1.2 billion, with up to an additional $200 million available pursuant to an accordion feature and (ii) may request borrowings under the Amended Revolving Credit Facility, at any time prior to the maturity date, in a total aggregate maximum amount not to exceed $2 billion, with up to an additional $500 million available pursuant to an accordion feature and incremental borrowing capacity available under a "grower" basket provision. Proceeds from each of the Amended Credit Facilities may be used for working capital, to refinance existing indebtedness, to purchase container equipment, and for general corporate purposes.
The Amended Term Loan Facility amortizes on a quarterly basis in an amount equal to two percent (2%) of the outstanding principal amount of the facility, with the remaining outstanding principal amount due at maturity, which will be May 27, 2026. The Amended Revolving Credit Facility has a maturity date of October 14, 2026.
TCIL and TALICC, as borrowers, are each jointly and severally liable for all obligations of the borrowers under the Amended Credit Facilities. Triton, as guarantor, has unconditionally guaranteed all of the obligations of the borrowers under each of the Amended Credit Facilities.
Neither the Amended Term Loan Facility nor the Amended Revolving Credit Facility is secured by any assets of TCIL, TALICC, Triton or any other person.
Borrowings under each of the Amended Credit Facilities bear interest at a rate equal to an applicable margin plus, at TCIL's option, either (a) a base rate determined by reference to the highest of (1) the U.S. federal funds rate plus 0.5%, (2) the prime rate of the administrative agent under the respective facility and (3) the daily LIBOR rate plus 1.0% or (b) LIBOR for the interest period relevant to such borrowing, adjusted for certain additional costs. The applicable margin in respect of base rate loans will be between 0.250% and 0.625% and the applicable margin in respect of LIBOR loans will be between 1.250% and 1.625%, in each case based on the rating of Triton's senior unsecured debt assigned by Standard & Poor's Ratings Services.
Under each of the Amended Credit Facilities, the Loan Parties are required to maintain (i) a ratio of total debt to consolidated tangible net worth not to exceed 4.0 to 1.0 and (ii) a minimum interest coverage ratio of not less than 1.25 to 1.0. Additionally, (x) under the Amended Term Loan Facility, TCIL and TALICC are required to maintain an unencumbered assets coverage ratio of not less than 1.20 to 1.0 and (y) under the Amended Revolving Credit Facility, the Loan Parties are required to maintain an unencumbered assets coverage ratio of not less than 1.20 to 1.0.
Each of the Amended Credit Facilities also contains customary representations and warranties, events of default and affirmative and negative covenants (with customary exceptions, qualifications and limitations).
The above description of the Amended Term Loan Facility and the Amended Revolving Credit Facility is qualified in its entirety by reference to the full text of the Amended and Restated Term Loan Agreement and the Eleventh Restated and Amended Credit Agreement, respectively, a copy of each of which will be filed as an exhibit to Triton's Quarterly Report on Form 10-Q for the quarter ended September 30, 2021.