US-based Trinity Industries and Wafra have unveiled a new railcar investment vehicle (RIV) programme, which aims to achieve $1bn in total acquisitions over a three-year investment period.
It will invest in varied portfolios of leased railcars originating from Trinity Industries Leasing Company (TILC).
The RIV is structured as the Signal Rail Holdings joint venture (JV), consisting of Trinity and certain funds managed by Wafra (Wafra Funds).
Wafra Funds will own 90% of the JV while TILC will own the remaining 10%.
Meanwhile, TILC will continue to provide services to all railcars owned by Signal Rail.
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Signal Rail has acquired an initial portfolio of around 3,600 railcars.
These railcars include a variety of on-lease railcars from TILC’s leased railcar fleet.
The acquisition of the initial portfolio was funded by the JV through SRL 2021-1, an asset-backed securitisation consisting of $265m in two classes of notes rated by KBRA and S&P.
Wafra CEO Fawaz Al-Mubaraki said: “Wafra is pleased to launch this partnership with Trinity, an established market and thought leader in railcar leasing and manufacture. Through this joint venture, Wafra builds on its portfolio of high-quality real asset investments.”
Trinity CEO and president Jean Savage added: “We are excited to join with Wafra as the latest partner in our RIV platform. This joint venture brings together parties with aligned strategies of long term investments in quality assets with high-quality investment partners like Wafra.
“We believe today’s announcement underscores the attractive return and cash flow attributes of our railcar assets. This partnership is an important milestone in Trinity’s long-term plan to optimise our balance sheet and amplify our return on equity.”
Trinity offers rail transportation products and services in North America.
Its TrinityRail platform is deployed to avail railcar leasing and management services, along with railcar manufacturing, maintenance, and alterations.
Wafra is an international alternative investment manager.