Russian private leasing company, Brunswick Rail Limited and its subsidiaries announced today that it is undertaking a refinancing of its syndicated facility in the principal approximate amount of RUB 4 billion.
As previously disclosed, the Company has continued to work with its lenders under the syndicated facility to address certain potential breaches described in its press releases on 28 September 2015 and 12 October 2015. As the syndicated facility matures in July 2016, the company determined it was in its best interests to pursue a refinancing option. Also as previously disclosed, in December 2015, OOO Brunswick Rail and Alfa-Leasing LLC signed a term sheet for the provision of up to RUB 4 billion of financing pursuant to two new sale and leaseback facilities (for 3,398 and 2,700 railcars, respectively).
Brunswick Rail entered into the first agreement with Alfa-Leasing LLC for the provision of approximately RUB 2.3 billion of financing under a sale and leaseback facility in relation to 3,398 railcars which were previously subject to pledge under the syndicated facility. Brunswick Rail is using the proceeds of this Alfa-Leasing LLC sale and leaseback facility, together with its own cash (in the approximate amount of RUR 1.7 billion), to effect a full repayment of the existing syndicated facility immediately upon the completion of the transaction. Brunswick Rail plans to enter into the second sale and leaseback facility agreement with Alfa-Leasing LLC relating to 2,700 railcars, for approximately RUB 1.7 billion, and will determine at a future date whether it will utilize that facility.
Pursuant to the sale and leaseback transactions, Brunswick Rail will simultaneously lease back any railcars sold. The leases have a term that ends in January 2018, and an interest rate of 16%, plus customary fees charged over the life of the facility. Brunswick Rail will have an option to repurchase leased railcars at any time during the lease term at a price determined in the finance lease agreement.