GATX has entered a definitive settlement to buy round 105,000 railcars from Wells Fargo for $4.4bn through its newly-established three way partnership (JV) with Brookfield Infrastructure Companions and its institutional companions.
The preliminary fairness possession of the JV is split between GATX, which holds 30%, and Brookfield Infrastructure, which holds 70%. GATX additionally has choices to step by step purchase full possession of the JV sooner or later.
GATX’s portfolio contains tank and freight railcars, plane spare engines, and tank containers.
The acquired portfolio, primarily freight vehicles (95%), has a 97% utilisation price and a various mixture of automobile sorts.
GATX president and CEO Robert Lyons mentioned: “All through our 125-plus-year historical past, we’ve developed distinctive asset, industrial and operational experience that positions us to amass and combine this fleet.
“Importantly, by buying the belongings on this method, we’ll keep the monetary flexibility and capability to proceed rising all of our companies whereas capitalising on the worth creation alternatives inherent within the belongings acquired.”
Moreover, Brookfield Infrastructure has additionally agreed to amass Wells Fargo’s rail finance lease portfolio, which incorporates round 23,000 railcars and roughly 440 locomotives.
GATX will act as supervisor of the railcars within the JV, in addition to the finance lease railcars and locomotives owned by Brookfield Infrastructure.
GATX’s preliminary $400m fairness contribution within the JV will likely be funded by working money circulation and financing, with future name choices, if exercised, permits the corporate to amass Brookfield’s stake in ten years or much less.
Moreover the companion fairness contributions, for the JV financing a totally underwritten $3.2bn 5 -year unsecured time period mortgage and a $250m unsecured revolving credit score facility is supplied by Wells Fargo Securities, BofA Securities, MUFG Financial institution and Sumitomo Mitsui Banking Company (SMBC).
BofA Securities suggested GATX and Brookfield Infrastructure. Mayer Brown is appearing as authorized counsel for GATX, whereas Skadden, Arps, Slate, Meagher & Flom is offering authorized companies to Brookfield Infrastructure.
The transaction, topic to regulatory approvals, is predicted to shut within the first quarter of 2026 or earlier.
“GATX, Brookfield Infrastructure to purchase Wells Fargo’s rail belongings for $4.4bn” was initially created and printed by Railway Expertise, a GlobalData owned model.
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