SL Capital joins £1bn UK rolling stock ticket

The third rail deal between the asset manager and Rock Infrastructure combines an equity investment with UK, European and North American institutional debt.

A consortium including Rock Infrastructure, Standard Life Investments and GLIL Infrastructure has committed £1 billion ($1.27 billion; €1.13 billion) for the construction of 750 new trains for lines servicing Waterloo Station.

The deal combines equity commitments from Rock Rail, the rolling stock division of Rock Infrastructure, SL Capital Partners and GLIL Infrastructure – a joint venture between the Greater Manchester Pension Fund and the London Pensions Fund Authority – with senior debt provided by UK, European and North American institutional investors.

SL Capital reached a £516 million final close on its debut infrastructure fund in February and is reportedly planning to fundraise again this year.

The 750 trains the consortium purchased consist of 90 new Aventra units that will be built by Bombardier Transportation for South Western rail operators FirstGroup and MTR. The new units will provide increased capacity and reduced journey times on the Windsor, Reading and West London routes. They will serve Waterloo Station and enter service in 2019.

The transaction marks Rock Rail and SL Capital’s third rolling stock deal together and the largest to date. Last October, the consortium hit a £600 million financial close on 378 new trains for the Abellio East Anglia franchise.

“Building on its previous rolling stock transaction structures, Rock Rail has secured broader and deeper funding from leading UK and overseas pension and insurance institutions who are directly investing in the UK’s long-term economic infrastructure,” Rock Rail chief executive Mark Swindell said.

Debt providers for the deal include Aviva Investors, Barings, LGIM Real Assets, MEAG Munich Ergo Asset Management, Rothesay Life, Lloyds Banking Group’s Scottish Widows platform, Standard Life Investments and Sun Life Assurance Company of Canada.