2005 Annual Report - Touax

Financial information concerning the assets,
financial position and results of the issuer
note 27.8. Additional information on Trust TCLRT 98
On 16 December 1998, the Group carried out a
second asset-backed securitization program with
regard to shipping containers, in the form of a Trust
registered in Delaware in the United States, known
as “TOUAX Container Lease Receivables Trust
TCLRT 98”. This Trust was financed entirely by non-
Group investors (Indenture Agreement) through the
issue of senior debt (notes) and subordinated debt
(certificates) to finance the purchase of shipping
containers for a total value of $40.40 million. They
are serviced (operated and managed) by the Group
under a management contract (Sale and Servicing
Agreement) for a minimum term of 10 years.
At the end of the contract, the Trust and the investors
may either sell the containers or operate them for an
additional two years. During these two years, the
Group must find a buyer for the containers. Although
it may submit an offer, it is only the Trust that can
decide to accept or refuse the conditions.
As at 31 December 2005, the Trust’s fleet comprised
14,295 containers (7,241 20’ Dry Cargo – 5,403 40’
Dry Cargo and 1,651 40’ High Cube) representing an
investment of $36.9 million, corresponding to 18,660
TEU by value.
In addition to the $5.54 million advanced by the
Group, the Trust’s balance sheet as at 31 December
2005 includes senior debt (notes) of $24.5 million
with a fixed interest rate of 5.94%, excluding insurance
and subordinated debt (certificates) amounting
to $5.7 million, bearing interest at 8.03%. The
total amount is repayable over five years (possible
extension of two years) by means of net revenues
distributed by the Group to the Trust according to the
conditions set out in the Master Lease Agreement
and the Sales and Servicing Agreement. The Trust
has also effected an insurance policy (Insurance and
Reimbursement Agreement) to guarantee the payment
of interest and principal payable on the senior
debt by the Trust to its investors (the “note holders”).
The Group’s assets include a collateral deposit of
$1.2 million and an advance against distribution of
$0.54 million provided by Gold Container Corp. as
well as a liquidity reserve of $3.8m formed by
TOUAX Container Leasing Corporation (Leasco 1),
amounting to a combined total of $5.54 million.
Leasco 1 also purchased 1,040 containers for an
initial value of $2,834,745. These are leased on
behalf of the Trust and have been delivered to the
Trust as security.
Should the Trust fail to meet the debt repayment
schedule, it shall be in default and may decide to
sell the containers or change operator. The Group
has no obligation either to buy back the equipment
or to repay the debt. The Group does not have
control of the Trust within the meaning of interpretation
SIC 12 “Consolidation – Special Purpose
Entities” and law no. 2003-706 of 1 August 2003 on
financial security. Consequently it is not part of the
scope of consolidation.
Repayment schedule for the Trust’s senior debt:
Minimum accumulated
Balance repayable
Date Payment dates redemption (in $ thousands)
16.12.1998 Closing date 34,000
16.12.2001 4th anniversary 3,627 30,373
16.12.2004 6th anniversary 7,533 22,840
16.12.2006 8th anniversary 13,020 9,820
15.01.2009 Maturity date 8,500
The financial expenses must be settled by the Trust each quarter.
annual report 2005
92
Consolidated accounts