Wednesday, February 19, 2025
Mark Reichman, Managing Director, Equity Research Analyst, Natural Resources, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
New asset-based lending credit facility. FreightCar America executed a new $35 million asset-based lending (ABL) credit agreement with Bank of America consisting of revolving loans and a sub-facility for letters of credit. Compared to the company’s previous ABL credit agreement, the new revolving credit facility offers a lower interest rate that is based on the secured overnight financing rate (SOFR) plus 175 basis points with a term ending on February 12, 2030.
Greater financial flexibility. The new facility is expected to provide the company with greater financial flexibility to support its growth and strategic objectives. Because the borrowing base requirements include eligible parts inventory and railcar inventory, we think the ability to borrow against its inventory could also provide the company with greater flexibility with respect to how it manages its production schedule.
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