Angel Trains refinances £800m through bonds

The UK rolling stock company has successfully issued a £300m 10-year ‘bullet’ bond and a £500m 25-year amortising bond as part of its debt refinancing programme.

Angel Trains, a UK-based rolling stock leasing company, has just issued £800 million (€949 million; $1.2 billion) of bonds as part of its long-term debt refinancing programme, the company said.

The issue includes a £300 million 10-year “bullet” bond and a £500 million 25-year amortising bond with a 14-year weighted average life. Proceeds from the bond issuances will be used to refinance a portion of bank debt that is due to mature in June 2011.

Goldman Sachs acted as financial adviser on the debt refinancing and joint bookrunner on the deal alongside Lloyds and Royal Bank of Scotland (RBS). George Lynn, chief financial officer of Angel Trains, expressed his satisfaction with the transaction:

“The issue is a key part of our long-term debt refinancing programme and strengthens the company by diversifying our sources of finance and our debt maturity profile.”

UK rolling stock companies have proved popular with investors due to their long-term contracts and steady cash flows.

In June 2008, RBS sold Angel Trains to Australian investor Babcock & Brown for about £3.6 billion. Following Babcock & Brown’s demise, Angel Trains is now a portfolio company of Babcock & Brown spinout Arcus Infrastructure Partners.

Later that year, Deutsche Bank, Lloyds and Antin Infrastructure – a fund sponsored by French bank BNP Paribas – paid £2 billion for Porterbrook, Abbey National’s rolling stock firm. Abbey National is now part of Spanish bank Santander.

Currently, a consortium of Morgan Stanley, 3i and UK-based investment firm Star Capital are in advanced negotiations to acquire HSBC’s rolling stock business, which the bank is said to value at £2 billion.