Legal & General buys return ticket with fourth £353m rolling stock deal

Legal & General has backed two UK rolling stock deals in a move that will see it invest £353 million ($478.9 million; €398.6 million) in the sector.

The investment, made on behalf of the Legal & General Retirement division, sees the group help finance the purchase of over 1,000 trains for use on two rail franchises.

The larger part of the commitment consists of a £183 million debt investment in Angel Trains, the rolling stock company providing a fleet of 665 trains to the Abellio East Anglia franchise from 2019. Legal & General’s principal portion is part of a wider £835 million package raised by the rolling stock lessor owned by AMP Capital and PSP Investments.

Legal & General also lent its support to the joint venture formed by Deutsche Asset Management and Infracapital last month with the backing of £170 million. The debt financing is part of a £571 million support facility provided to the duo’s Corelink Rail Infrastructure platform, which will operate on the UK’s new West Midlands Trains franchise.

Legal & General has now completed four rolling stock deals, with its support to the sector in the UK totalling £550 million. The quality and quantity of the country’s rolling stock has been questioned this week amid a rise in fares and Mark Carne, chief executive of the UK’s rail operator Network Rail, admitted that things need to improve.

“We know that the infrastructure is not good enough; some of the trains are getting older and train reliability has not been as we have liked it to be,” he said, according to The Times. “So there are a number of areas where the industry knows we need to improve, but the kind of investment the industry is making today in new rolling stock and new railways will deliver a fundamentally better railway in years to come.”