Brunswick Rail, Russia’s leading railcar operating lessor, announced today that it has raised an additional $120 million via an increase on $300 mn EBRD and IFC loan facilities.
The company also improved operational flexibility and loan facility terms in general, which reflects Brunswick Rail’s solid business performance.
The additional funds will be used to finance the purchase of new freight railcars in order to meet demand from the company’s corporate clients.
The additional $120 million was provided by the senior lenders and participants in both facilities. At the same time, lenders agreed to introduce further operational flexibility for both facilities.
The provision of the additional money and improvement of the loan terms reflect Brunswick Rail’s strong operational results and current Russian rail freight market conditions.
The company has already invested the funds provided in December 2010 into the acquisition of more than 6,000 railcars.
In addition, the terms of Brunswick Rail’s existing leasing contracts were improved due to ‘favourable market conditions and high demand for railcars’.
Brunswick Rail CEO and Managing Partner, Vladimir Lelekov, said:
“This additional funding from the EBRD and IFC will enable us to continue to finance our significant fleet investment programme as we aim to take advantage of a growing trend by many of Russia’s leading industrial and transport companies to shift from owning rolling stock to leasing it under operating lease contracts.
“Despite the current unrest in the world economy, we see good growth potential in the Russian rail market, where penetration of operating leasing is still low compared to the United States and Europe.”
The EBRD is lending $290 million under an EBRD A/B loan structure, and has used its own funds to provide an eight-year A loan of $160 million.
The IFC is the lender of $130 million under an IFC A/B loan structure, and has used its own funds to provide an eight-year A loan of $50 million.
