FreightCar America, Inc. Announces Agreement to Redeem All Outstanding Preferred Shares with New Term Loan
Rhea-AI Summary
FreightCar America (NASDAQ: RAIL) has secured a new $115 million 4-year term loan facility to redeem all outstanding Series C Preferred Stock shares and settle accrued dividends. The new financing, completed on December 31st, 2024, is priced at SOFR + 600, resulting in a 40% reduction in the company's cost of capital.
This reduction is expected to generate savings of approximately $9.2 million in the first year, equivalent to $0.26 per share on a fully diluted basis. The strategic financial move aims to enhance the company's financial flexibility and cash flow generation while supporting its growth strategy.
Positive
- 40% reduction in cost of capital through new term loan
- $9.2 million expected annual savings ($0.26 per share)
- Complete redemption of Series C Preferred Stock, simplifying capital structure
- Enhanced financial flexibility and cash flow generation
Negative
- New $115 million debt obligation
- Exposure to variable interest rates (SOFR + 600)
News Market Reaction – RAIL
On the day this news was published, RAIL gained 0.39%, reflecting a mild positive market reaction.
Data tracked by StockTitan Argus on the day of publication.
New financing arrangement reduces Company’s cost of capital by approximately
Further enhances financial flexibility, cash generation and ability to support growth strategy
CHICAGO, Jan. 06, 2025 (GLOBE NEWSWIRE) -- FreightCar America, Inc. (NASDAQ: RAIL) (“FreightCar America” or the “Company”), a diversified manufacturer and supplier of railroad freight cars, railcar parts and components, today announced it has completed a new term loan facility. The proceeds from the term loan will be used to redeem all outstanding shares of Series C Preferred Stock, as well as settle all related accrued dividends.
Highlights:
- The Company closed a
$115 million 4-year term loan agreement on December 31st, 2024 (the “Term Loan”). - Proceeds from the Term Loan were used to redeem all 85,412 shares of Series C Preferred Stock that were outstanding and all accrued dividends as of December 31st, 2024.
- The Term Loan is priced at SOFR + 600, which will reduce the Company’s existing cost of capital by approximately
40% , resulting in savings of approximately$9.2 million in the first year, or approximately$0.26 per share on a fully diluted basis.
Mike Riordan, Chief Financial Officer of FreightCar America, commented, “As further testament to the strength and momentum of FreightCar America, I am extremely pleased to announce that we have taken an important step to improve our capital structure and lower borrowing costs. The completion of this financing along with the retirement of our Series C Preferred Stock enhances our financial flexibility, cash flow generation and allows us to continue executing our growth strategy with even greater confidence and agility.”
For additional information about the Company’s update, please refer to the Company’s Form 8-K filed today with the Securities and Exchange Commission.
About FreightCar America
FreightCar America, headquartered in Chicago, Illinois, is a leading designer, producer and supplier of railroad freight cars, railcar parts and components. We also specialize in railcar repairs, complete railcar rebody services and railcar conversions that repurpose idled rail assets back into revenue service. Since 1901, our customers have trusted us to build quality railcars that are critical to economic growth and instrumental to the North American supply chain. To learn more about FreightCar America, visit www.freightcaramerica.com.
Investor Contact RAILIR@Riveron.com
FAQ
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