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Textainer in new $600m credit agreement

Johannesburg - Textainer Group Holdings Limited‚ of which Trencor [JSE:TRE] owns 48.93%‚ announced on Tuesday it had entered into a $600m‚ five-year revolving credit agreement with a group of financial institutions led by Merrill Lynch.

"We continue to see an attractive environment for growth given increased reliance by our shipping line customers on container lessors. This new bank facility‚ with its attractive cost of funds‚ will provide additional liquidity enabling Textainer to take advantage of these favourable trends to maintain our leadership position in the industry‚" Philip Brewer‚ Textainer President and CEO‚ said in a statement on Tuesday.

The group said that the interest rate under the credit agreement is a spread over the London Interbank Offered Rate (Libor) which varies based on leverage. At the closing‚ the initial interest rate will be Libor plus 150 basis points.

It added that the proceeds from the borrowings was expected to be used to purchase containers and for general corporate purposes.

“The facility also provides for a possible $100m increase through an accordion feature the Company may elect to utilise‚” the group said.

According to the statement‚ the new credit agreement represents a renewal and expansion of an existing five-year‚ $205m revolving credit facility.

"Year-to-date the Company has completed approximately $2.4bn of financing in the debt and equity markets‚ resulting in over $1.3bn in net incremental funding. We appreciate the participation of new and existing banks and believe this is a clear indication of their confidence in our business model‚ disciplined operating philosophy and growth opportunities‚” said commented Hilliard Terry‚ Textainer Executive Vice President and CFO.


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