U-Haul 2016 Annual Report Download - page 75

AMERCO AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)
F-19
Working Capital Loans
Amerco Real Estate Company is a borrower under an asset backed working capital loan. The
maximum amount that can be drawn at any one time is $25.0 million. At March 31, 2016 the full $25.0
million was available to be drawn. This loan is secured by certain properties owned by the borrower. This
loan agreement provides for revolving loans, subject to the terms of the loan agreement. This agreement
was amended on April 30, 2016. As part of the amendment the maximum amount that can be borrowed
was increased to $50 million and the maturity date was extended to September 2018. This loan requires
monthly interest payments with the unpaid loan balance and accrued and unpaid interest due at maturity.
U-Haul International, Inc. and AMERCO are the guarantors of this loan. The default provisions of the loan
include non-payment of principal or interest and other standard reporting and change-in-control
covenants. The interest rate is the applicable LIBOR plus a margin of 1.25%.
Fleet Loans
Rental Truck Amortizing Loans
U-Haul International, Inc. and several of its subsidiaries are borrowers under amortizing term loans.
The balance of the loans as of March 31, 2016 was $219.0 million with the final maturities between April
2016 and July 2022.
The Amortizing Loans require monthly principal and interest payments, with the unpaid loan balance
and accrued and unpaid interest due at maturity. These loans were used to purchase new trucks. The
interest rates, per the provision of the Loan Agreements, are the applicable LIBOR plus the applicable
margins. At March 31, 2016, the applicable LIBOR was between 0.44% and 0.45% and applicable
margins were between 1.72% and 2.50%. The interest rates are hedged with interest rate swaps fixing
the rates between 2.82% and 4.76% based on current margins. Additionally, $137.6 million of these loans
are carried at fixed rates ranging between 1.95% and 3.94%.
AMERCO and U-Haul International, Inc. are guarantors of these loans. The default provisions of these
loans include non-payment of principal or interest and other standard reporting and change-in-control
covenants.
Rental Truck Securitizations
2010 U-Haul S Fleet and its subsidiaries (collectively, “2010 USF”) issued a $155.0 million asset-
backed note (“2010 Box Truck Note”). 2010 USF is a bankruptcy-remote special purpose entity wholly-
owned by U-Haul International, Inc. The net proceeds from the securitized transaction were used to
finance new box truck purchases. U.S. Bank, NA acts as the trustee for this securitization.
The 2010 Box Truck Note has a fixed interest rate of 4.90% with an expected final maturity of October
2017. At March 31, 2016, the outstanding balance was $62.8 million. The note is secured by the box
trucks purchased and the corresponding operating cash flows associated with their operation.
The 2010 Box Truck Note is subject to certain covenants with respect to liens, additional indebtedness
of the special purpose entity, the disposition of assets and other customary covenants of bankruptcy-
remote special purpose entities. The default provisions of this note include non-payment of principal or
interest and other standard reporting and change-in-control covenants.
Rental Truck Revolvers
Various subsidiaries of U-Haul International, Inc. entered into a revolving fleet loan for $75 million,
which can be increased to a maximum of $225 million. The loan matures in September 2018. The interest
rate, per the provision of the Loan Agreement, is the applicable LIBOR plus the applicable margin. At
March 31, 2016, the applicable LIBOR was 0.44% and the margin was 1.75%, the sum of which was
2.19%. Only interest is paid during the first four years of the loan with principal due monthly over the last
nine months. As of March 31, 2016, the outstanding balance was $57.0 million.