Having now completed four rolling stock deals, committing a total of more than £550 million of investment to date to the sector, these latest transactions form part of Legal & General’s continued commitment to increasing its exposure to transport infrastructure.
2 Jan 2018
Legal & General is helping to finance a fleet of 665 Bombardier Aventra trains that will be leased to Abellio East Anglia franchise from 2019. The £183 million long term debt investment by LGIM Real Assets, on behalf of clients including Legal & General Retirement (LGR) is part of a total £835m commitment made from a group of lenders to finance this fleet for Angel Trains Group, outside of the credit-rated group. Angel Trains Group is one of Britain's leading train leasing companies. This new fleet of Bombardier Aventra vehicles will help to increase train frequency and reduce passenger’s journey times. It will also provide a more energy efficient and modern fleet of trains for its customers. Legal & General Retirement was the principal investor on this deal.
Legal & General has also provided finance to supply in excess of 400 vehicles to be manufactured by Bombardier and CAF for use on the United Kingdom’s West Midlands franchise. Increasing the fleet size by approximately 25%, this investment will help increase capacity, delivering on a key requirement set out by the Department for Transport as part of the franchise renewal. LGIM Real Assets, on behalf of clients including Legal & General Retirement (LGR), has provided £170 million of long term debt to support the entry of Corelink Rail Infrastructure, a new rolling stock lessor platform jointly owned by Deutsche Asset Management and Infracapital, into the market, as part of a £571m debt package provided by institutional investors and banks. Legal & General Retirement was the principal provider of long term financing on this deal.
Hayley Rees, Head of Direct Investments at LGR, said: “By helping to finance significant improvements to Britain's rail network, we can use UK pension money to help to increase capacity, relieve congestion and provide better passenger facilities, while matching our long term income liabilities. Good transport infrastructure can enhance labour mobility and increase economic growth. This is great for business and great for our customers.”
Tom Sumpster, Head of Infrastructure Finance at LGIM Real Assets, said: “Improving our UK train services will in return act as a stimulus for economic growth. These two deals further expand LGIM’s clients’ exposure to essential infrastructure projects in the UK, offering them long-term, stable cash flows and in both cases, alongside experienced infrastructure asset owners. Our ability to deploy capital into strategic assets is testament to our holistic real assets strategy and the deep cross sector expertise that we have now embedded into our business.”
Legal & General has invested £12 billion in UK infrastructure, direct investments and urban regeneration projects to date, and aims to invest £15 billion. Long-term capital is a good match for investment into new assets, providing income for pension funds and stimulating UK economic growth.