Aviva Investors provides senior debt for new Bombardier trains

Financial close has been reached on the £1 billion financing of new Bombardier trains for the new South Western franchise operators FirstGroup and MTR.

The transaction was led by sponsor Rock Rail and partners SL Capital (part of Standard Life Investments) and GLIL Infrastructure LLP, who all provided the equity investment.

This is the biggest single UK rolling stock loan to date and Aviva Investors provided the largest amount of institutional debt.

The core fleet will enter service from mid 2019 and consists of 90 new, state of the art ‘AVENTRA’ trains made up of 750 electric multiple unit vehicles to be built by UK manufacturer Bombardier Transportation. As well as offering a significantly enhanced passenger experience, increased capacity and reduced journey times on the Windsor, Reading and West London suburban routes serving Waterloo station, the 10-carriage formation trains included in the fleet are designed to match platform extension developments that are planned as part of the wider Waterloo and South West Upgrade programme. 

Sinéad Walshe, Aviva Investors Debt Team, said:

“We are delighted to continue our active investment within the UK rolling stock market.  This is an important transaction as the new Bombardier fleet with provide increased network capacity and enhanced facilities for passengers on the South Western network.”

Mark Swindell, Chief Executive Officer of Rock Rail said:

“In its largest deal to date, Rock Rail is delighted to have reached successful close on the £1 billion funding of this fleet of trains for First/MTR. 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 U.K.’s long term economic infrastructure. The provision of this long term, highly competitive funding enables the delivery of significantly enhanced value for money to South Western rail passengers and the tax payer over the life of the trains, as well as stepped improvements in passenger, environmental and operational features.”

Daniel Hobson, Senior Investment Manager, Greater Manchester Pension Fund; Investment Committee Member, GLIL said:

“This project is an excellent example of how pension investors can work with the private sector to help build the future of the UK.  We are heavily reliant on our rail infrastructure, and these upgrades will mean better passenger experience while at the same time helping to provide stable returns for the GLIL-affiliated pension funds up and down the UK.”

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