Triton International Prices Preferred Issue-UPDATE

NOTE–POTENTIAL INVESTORS SHOULD DOUBLE CHECK FOR WHETHER THE DIVIDEND IS QUALIFIED OR NOT. THE PRELIMINARY PROSPECTUS SEEMS TO CONTRADICT ITSELF – 1 SECTION SAYS DIVIDENDS AND ANOTHER SECTION SAYS ORDINARY INCOME.

Container leasing company Triton International LTD (NASDAQ:TRTN) has priced a new issue perpetual preferred shares with a fixed rate coupon of 8.50%.

This issue is fairly junky with a Standard and Poor’s rating of B+. While the issue will likely be just fine as long as the economy remains fairly strong, but will be dicier whenever the economy weakens.

The terms of the issue are the normal terms. The dividends will be cumulative and will NOT be qualified for preferential tax treatment (per the prospectus).

The shares will have an optional redemption period starting 3/15/2024.

The shares will trade with the permanent ticker symbol of TRTN-A eventually. The shares will likely trade on the OTC Grey market, but no ticker has been announced as of yet.

The final pricing document can be seen here.

The companies website can be seen here.

NOTE–the company is domiciled in Bermuda so we may have some brokers attempt to charge incremental fees when buying or selling this issue.

7 thoughts on “Triton International Prices Preferred Issue-UPDATE”

  1. Looks like QDI to me, barring PFIC concerns which they don’t expect.

    https://www.sec.gov/Archives/edgar/data/1660734/000119312519071486/d717243d424b5.htm
    We believe that all or a portion of the distributions you would receive from us with respect to your Series A Preference Shares would constitute dividends. If you are an individual citizen or resident of the United States or a U.S. estate or trust and meet certain holding period requirements, such dividends would be expected to be taxable as “qualified dividend income” that is taxable at preferential capital gains tax rates. Any portion of your distribution that is not treated as a dividend will be treated first as a non-taxable return of capital to the extent of your tax basis in your Series A Preference Shares and, thereafter, as capital gain.

    1. Hi xerty–here is what I see in the prospectus

      Tax Consequences to U.S. Holders

      Dividends

      Dividends paid with respect to our Series A Preference Shares will generally be taxed as ordinary income to U.S. Holders to the extent that they are paid out of Triton’s current or accumulated earnings and profits, as determined under U.S. federal income tax principles. To the extent that the amount of any dividend exceeds our current and accumulated earnings and profits for a taxable year, the excess will first be treated as a tax-free return of capital to the extent of the holder’s adjusted basis in the Series A Preference Share, causing a reduction in such adjusted basis in the same amount. The balance of the excess, if any, will be taxed as capital gain, which will be long-term capital gain if the Series A Preference Share has been held for more than one year at the time the dividend is received (as described below under “—Sale, Exchange or Other Taxable Disposition”).

  2. Tim, I’ve not been around much lately due to tax season work but thanks for the update. Leverage is fairly high for the company in a cyclical business and it will be interesting to see where they price the issue.

    1. kaptain lou, this is a fixed 8.50% cumulative preferred. Should start trading tomorrow my friend, Nomad

      1. Thank you Nomad, I will take a look as time allows. S-Corp and Partnership returns are due on 3/15, but my tax season work will be done soon. Leverage is high on this one, but may pick up a few shares.

  3. Triton International Announces Pricing of Public Offering of Series A Preference Shares

    Business Wire Business WireMarch 12, 2019
    HAMILTON, Bermuda–(BUSINESS WIRE)–

    Triton International Limited (TRTN) (the “Company” or “Triton”) today announced the pricing of an underwritten offering of 3.0 million 8.50% Series A Cumulative Redeemable Perpetual Preference Shares with a liquidation preference of $25.00 per share (the “Series A Preference Shares”) for gross proceeds of $75.0 million. Triton also granted the underwriters a 30-day option to purchase up to an additional 450,000 Series A Preference Shares.

    The Company intends to use the net proceeds from the offering for general corporate purposes, including the purchase of containers, the repurchase of outstanding common shares, payment of dividends and the repayment or repurchase of outstanding indebtedness. In the short-term, the Company intends to repay borrowings under one of the Company’s revolving credit facilities. The offering is expected to close on March 15, 2019, subject to customary closing conditions.

    Wells Fargo Securities, LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co. LLC and RBC Capital Markets, LLC are acting as joint book-running managers for the offering. The offering is made pursuant to an effective shelf registration statement, previously filed with the Securities and Exchange Commission (the “SEC”). The offering is being made only by means of a prospectus supplement and a related prospectus, copies of which may be obtained on the SEC’s website at http://www.sec.gov or by contacting:

    Wells Fargo Securities, LLC
    Attn: WFS Customer Service
    608 2nd Avenue South
    Minneapolis, MN 55402
    (800) 645-3751
    wfscustomerservice@wellsfargo.com

    Merrill Lynch, Pierce, Fenner & Smith
    Incorporated
    Attn: Prospectus Department
    200 North College Street
    NC1-004-03-43
    Charlotte, NC 28255
    (800) 294-1322
    dg.prospectus_requests@baml.com

    Morgan Stanley & Co. LLC
    Attn: Prospectus Department
    1585 Broadway, 29th Floor
    New York, NY 10036
    (866) 718-1649
    prospectus@morganstanley.com

    RBC Capital Markets, LLC
    Attn: Transaction Management
    200 Vesey Street, 8th Floor
    New York, NY 10281
    (866) 375-6829
    rbcnyfixedincomeprospectus@rbccm.com

    This press release shall not constitute an offer to sell or the solicitation of any offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

    Important Cautionary Information Regarding Forward-Looking Statements

    Certain statements in this release, other than purely historical information, are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Statements that include the words “expect,” “intend,” “plan,” “believe,” “project,” “anticipate,” “will,” “may,” “would” and similar statements of a future or forward-looking nature may be used to identify forward-looking statements. All forward-looking statements address matters that involve risks and uncertainties, many of which are beyond Triton’s control. Accordingly, there are or will be important factors that could cause actual results to differ materially from those indicated in such statements and, therefore, you should not place undue reliance on any such statements.

    These factors include, without limitation, economic, business, competitive, market and regulatory conditions and the following: decreases in the demand for leased containers; decreases in market leasing rates for containers; difficulties in re-leasing containers after their initial fixed-term leases; customers’ decisions to buy rather than lease containers; dependence on a limited number of customers for a substantial portion of revenues; customer defaults; decreases in the selling prices of used containers; extensive competition in the container leasing industry; difficulties stemming from the international nature of its business; decreases in the demand for international trade; disruption to its operations resulting from the political and economic policies of the United States and other countries, particularly China, including but not limited to the impact of trade wars and tariffs; disruption to its operations from failures of, or attacks on, its information technology systems; disruption to its operations as a result of natural disasters; compliance or failure to comply with laws and regulations related to economic and trade sanctions, security, anti-terrorism, environmental protection and corruption; ability to obtain sufficient capital to support our growth; restrictions imposed by the terms of our debt agreements; changes in tax laws in Bermuda, the United States and other countries and other risks and uncertainties, including those risk factors set forth in the section entitled “Risk Factors” in our Form 10-K filed with the SEC on February 19, 2019 and our preliminary prospectus supplement and accompanying prospectus related to the public offering filed with the SEC on March 12, 2019.

    The foregoing list of important factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included herein and elsewhere. Any forward-looking statements made herein are qualified in their entirety by these cautionary statements, and there can be no assurance that the actual results or developments anticipated by us will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, Triton or its businesses or operations. Except to the extent required by applicable law, we undertake no obligation to update publicly or revise any forward-looking statement, whether as a result of new information, future developments or otherwise.

    About Triton International Limited

    Triton International Limited is the world’s largest lessor of intermodal freight containers. With a container fleet of 6.2 million twenty-foot equivalent units, Triton’s global operations include acquisition, leasing, re-leasing and subsequent sale of multiple types of intermodal containers and chassis.

    View source version on businesswire.com: https://www.businesswire.com/news/home/20190312005931/en/

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