GENERAL FINANCE CORPORATION AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
Credit Suisse Term Loan
On March 31, 2014, the Company entered into a $25,000,000 facility agreement, as amended, with Credit Suisse (Credit Suisse Term
Loan) as part of the financing for the acquisition of Lone Star and, on April 3, 2014, the Company borrowed the $25,000,000 available to it. The Credit Suisse Term Loan provided that the amount borrowed would bear interest at LIBOR plus
7.50% per year, would be payable quarterly and that all principal and interest would mature on July 1, 2018. In addition, the Credit Suisse Term Loan was secured by a first ranking pledge over substantially all shares of RWH owned by GFN U.S.,
required a certain coverage maintenance ratio in U.S. dollars based on the value of the RWH shares and, among other things, that an amount equal to six-months interest be deposited in an interest reserve
account pledged to secure repayment of all amounts borrowed. The Company
had repaid, prior to maturity, $15,000,000 of the outstanding borrowings of the
Credit Suisse Term Loan and, as of June 30, 2017, $9,920,000 remained outstanding, net of unamortized debt issuance costs of $80,000. On September 25, 2017, in connection with the acquisition of the noncontrolling interest of Royal Wolf
(see Note 4), the Credit Suisse Term Loan was fully repaid.
On June 18, 2014, the Company completed the sale of unsecured senior notes (the Senior Notes) in a public offering for an
aggregate principal amount of $72,000,000. On April 24, 2017, the Company completed the sale of a tack-on offering of its publicly-traded Senior Notes for an aggregate principal amount of
$5,390,000 that was priced at $24.95 per denomination. Net proceeds were $5,190,947, after deducting an aggregate original issue discount (OID) of $10,780 and underwriting discount of $188,273. In both offerings, the Company used at
least 80% of the gross proceeds to reduce indebtedness at Pac-Van and Lone Star under the Wells Fargo Credit Facility in order to permit the payment of intercompany dividends by
Pac-Van and Lone Star to GFN to fund the interest requirements of the Senior Notes. For the tack-on offering, this amounted to $4,303,376 of the net
proceeds. The Company has total outstanding publicly-traded Senior Notes in an aggregate principal amount of $77,390,000 ($75,319,000 and $75,570,000, net of unamortized debt issuance costs of $2,071,000 and $1,820,000, at June 30, 2017 and
December 31, 2017, respectively).
The Senior Notes were issued in minimum denominations of $25 and integral multiples of $25 in
excess thereof and pursuant to the First Supplemental Indenture (the First Supplemental Indenture) dated as of June 18, 2014 by and between the Company and Wells Fargo, as trustee (the Trustee). The First Supplemental
Indenture supplements the Indenture entered into by and between the Company and the Trustee dated as of June 18, 2014 (the Base Indenture and, together with the First Supplemental Indenture, the Indenture). The Senior
Notes bear interest at the rate of 8.125% per annum, mature on July 31, 2021 and are not subject to any sinking fund. Interest on the Senior Notes is payable quarterly in arrears on January 31, April 30, July 31 and
October 31, commencing on July 31, 2014. The Senior Notes rank equally in right of payment with all of the Companys existing and future unsecured senior debt and senior in right of payment to all of its existing and future
subordinated debt. The Senior Notes are effectively subordinated to any of the Companys existing and future secured debt, to the extent of the value of the assets securing such debt. The Senior Notes are structurally subordinated to all
existing and future liabilities of the Companys subsidiaries and are not guaranteed by any of the Companys subsidiaries.
Company had an option, prior to July 31, 2017, to redeem the Senior Notes in whole or in part upon the payment of 100% of the principal amount of the Senior Notes being redeemed, plus any additional amount required by the Indenture. In
addition, the Company may have redeemed up to 35% of the aggregate outstanding principal amount of the Senior Notes before July 31, 2017 with the net cash proceeds from certain equity offerings at a redemption price of 108.125% of the principal
amount plus accrued and unpaid interest. The Company has not redeemed any of its Senior Notes as July 31, 2017.
If the Company sells
certain of its assets or experiences specific kinds of changes in control, as defined, it must offer to redeem the Senior Notes. The Company may, at its option, at any time and from time to time, on or after July 31, 2017, redeem the Senior
Notes in whole or in part. The Senior Notes will be redeemable at a redemption price initially equal to 106.094% of the principal amount of the Senior Notes (and which declines each year on July 31) plus accrued and unpaid interest to the date of
redemption. On and after any redemption date, interest will cease to accrue on the redeemed Senior Notes.