US-based railroad transportation company Greenbrier has announced its plans to form a new leasing joint venture (JV) with the Longwood Group to expand its owned portfolio of leased railcars.
Based in Chicago, Longwood is a transportation equipment advisory and asset management company.
Known as GBX Leasing, the new JV will obtain roughly $200m of newly built and leased railcars from Greenbrier in a year.
GBX Leasing’s initial portfolio will be identified from leased railcars on Greenbrier’s balance sheet or in its backlog.
GBX Leasing will follow Greenbrier’s firm portfolio standards for long-term investment, including credit quality, balanced maturities, asset liquidity and asset diversity.
Greenbrier CEO and chairman William A Furman said: “The railcar portfolio built by GBX Leasing will create a new annuity stream of tax-advantaged cash flows while reducing Greenbrier’s exposure to the new railcar order and delivery cycle. This move bolsters Greenbrier’s value proposition for its customers and shareholders.”
Greenbrier will hold 95% of GBX Leasing while the remaining 5% will be owned by Longwood.
Greenbrier will offer remarketing, lease originations, and railcar administrative services to GBX Leasing.
On the other hand, Longwood will offer strategic and investment guidance, portfolio management and management oversight.
Greenbrier stated that Longwood CEO D Stephen Menzies will serve as the chairman and CEO of the new JV.
Menzies said: “I am excited to expand our relationship and to partner with Greenbrier in this important strategic development. Based on my experience, I am confident that GBX Leasing will deliver strong value to Greenbrier customers and its investors.”
Final documentation for the formation of GBX Leasing is currently underway.
Origination and funding of GBX Leasing are expected to take place in the first calendar quarter of this year.