LGIM Real Assets will invest more than £350 million ($475 million) toward improving U.K. train services.
Having now completed four rolling stock deals, committing a total of more than £550 million ($747 million) of investment to date to the sector, these latest transactions form part of Legal & General’s continued commitment to increasing its exposure to transport infrastructure.
Legal & General is helping to finance a fleet of 665 Bombardier Aventra trains that will be leased to Abellio East Anglia franchise from 2019. The £183 million ($248 million) long-term debt investment by LGIM Real Assets, on behalf of clients including Legal & General Retirement (LGR), is part of a total £835 million ($1.13 billion) commitment made from a group of lenders to finance this fleet for Angel Trains Group, outside of the credit-rated group. Angel Trains Group is one of Britain’s train leasing companies. The new fleet of Bombardier Aventra vehicles will help to increase train frequency and reduce passenger’s journey times. It will also provide a more energy-efficient and modern fleet of trains for its customers. Legal & General Retirement was the principal investor on this deal.
Legal & General has also provided finance to supply in excess of 400 vehicles to be manufactured by Bombardier and CAF for use on the United Kingdom’s West Midlands franchise. Increasing the fleet size by approximately 25 percent, this investment will help increase capacity, delivering on a key requirement set out by the Department for Transport as part of the franchise renewal. LGIM Real Assets, on behalf of clients including LGR, has provided £170 million ($231 million) of long-term debt to support the entry of Corelink Rail Infrastructure, a new rolling stock lessor platform jointly owned by Deutsche Asset Management and Infracapital, into the market, as part of a £571 million ($775 million) debt package provided by institutional investors and banks. Legal & General Retirement was the principal provider of long-term financing on this deal.
Legal & General has invested £12 billion ($16 billion) in U.K. infrastructure, direct investments and urban regeneration projects to date, and aims to invest £15 billion ($20 billion). Long-term capital is a good match for investment into new assets, providing income for pension funds and stimulating U.K. economic growth.
