Armory Securities, LLC is pleased to announce that FreightCar America (“FCA”) (NASDAQ: RAIL) has secured $115 million of new financing, the proceeds of which were used to refinance existing perpetual preferred equity. The new financing provides FCA with a lower cost of capital and allows it to de-lever rapidly as it generates free cash flow. Amory served as exclusive financial advisor and placement agent to FCA for the transaction.
FreightCar America is a premier railcar manufacturer and aftermarket parts supplier to the North American railcar industry, with 280,000+ railcars in service today (~17% of North American fleet). As the Company continued to exceed plan in 2024, FCA looked to normalize its cost of capital by refinancing its perpetual preferred equity.
This transaction is the culmination of a long-standing strategic advisory relationship between Armory and FCA. In 2019, Armory was first retained by FCA as an advisor to assist in exploring and implementing strategic alternatives including negotiating the Company’s lease termination from the State of Alabama and finding a new strategic partner for the move to Mexico. In 2020, Armory closed a $60M facility with a senior secured debt provider / strategic partner to provide initial liquidity through the Company’s transition. In 2023, Armory helped the Company negotiate with the strategic partner to convert their debt into perpetual preferred to delever its balance sheet, reinvest cashflow into the business, and provide customers confidence in doing business with the Company.
In 2024, Armory conducted a robust marketing process to lower the Company’s cost of capital and take out the existing preferred debt given the Company’s recent positive performance. The financing that was placed consisted of a $115 million Senior Secured Term Loan, reducing FCA’s cost of capital by approximately 40%.
For information on this transaction or about Armory Securities, please contact one of the following deal team members:
Nick Tell
Senior Managing Director
ntell@armorysecurities.com
310.220.6403
Ron Papile
Director
rpapile@armorysecurities.com
818.967.6480
Armory Securities, a division of Armory Group, LLC, is a leading investment bank dedicated to helping middle market companies and their constituents. Armory Group, through its subsidiaries, provides investment banking services, asset management services and advisory services, including enterprise transformation and interim management, to middle market companies and their stakeholders. Learn more about Armory Group, and its subsidiaries, at www.armorygroupllc.com.
Armory Securities, LLC, member FINRA, Member SIPC