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Rail investors set the pace
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| 28 July 2006 |
By Anthony O'Connor
With more sources of finance chasing deals, lessees can call the pricing shots to a large extent, making this one of the most finely priced aspects of transport finance.
While there are European banks that have demonstrated an appetite for rail-asset risk, these are being joined by UK banks eager to use their asset finance and leasing resources in the post-tax lease industry.
"We are seeing an increasing number of banks offering resources and financing to rail companies in the continental European market. Most of the activity is currently in Germany and the Netherlands with deal sizes -- looking at the regional passenger rail market -- ranging from EUR50 million (USD63 million) to EUR120 million," says Martin Metz, head of European land transport at DVB Bank in Frankfurt.
Many of those interested banks are working with lessors to tap into the growing demand for rolling-stock operating leases. Banks are looking at structured deals featuring senior, mezzanine and junior debt as well as equity.
Europe's national rail operators, such as SNCF in France, Deutsche Bahn in Germany and FS in Italy, have always been able to tap the long-term bond markets for their capital investment programmes and, aside from tax-based products in the past, this group of rail operators is largely outside of the target group of the growth in European rail finance.
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