Babcock & Brown have announced that it has established a new company to facilitate development of CBRail's activities (the owners of a number of Euro 66s). The new company has a €390 million long-term financing platform enabling the €330 million acquisition of CBRail’s existing rolling stock assets and providing a €60 million facility for future acquisitions.

Mezzanine debt is provided by HSH Nordbank. The mandated lead senior debt arranger and underwriter is Sumitomo Mitsubishi Banking Corporation (“SMBC”), with Banco Espirito Santo De Investimento also as lead arranger, Bank of Scotland Corporate as underwriter and KfW IPEX-Bank as joining underwriter. General syndication is expected to be launched in September with SMBC as the book runner.

Phil Davy, Head of Eurorail at Babcock & Brown said “This initiative creates a platform to pursue our plans to grow CBRail’s business in partnership with Bank of Scotland. The transaction is a first in the European market, both in respect of the portfolio composition and the innovative capital structure. It broadens the financing base for CBRail supported by a consortium of leading banks that recognise the increasing significance of rail in the economic development of Europe.”

Ed Wilson of Bank of Scotland said “It was always envisaged that CBRail would look to a wider international banking market to syndicate its debt raising exercise and this transaction is a fundamental step towards this. The lead underwriters deserve special thanks and CBRail looks forward to the syndication process whereby it will be able to access core funding partners for its future development.”