US companies Trinity Industries and Wafra have unveiled a new rail investment vehicle (RIV) program, which aims to complete $ 1 billion in acquisitions over a three-year investment period.
It will invest in various portfolios of leased rail cars sourced from Trinity Industries Leasing Company (TILC).
The RIV is structured as the Joint Venture (JV) Signal Rail Holdings, 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%.
During this time, TILC will continue to provide service to all cars owned by Signal Rail.
Signal Rail has acquired an initial portfolio of approximately 3,600 railcars.
These cars include a variety of rental cars from TILC’s rental car fleet.
The acquisition of the initial portfolio was funded by the JV through SRL 2021-1, an asset-backed securitization consisting of $ 265 million in two rating categories rated by KBRA and S&P.
Wafra CEO Fawaz Al-Mubaraki said, âWafra is delighted to launch this partnership with Trinity, an established market and thought leader in railcar rental and manufacturing. Thanks to this joint venture, Wafra relies on its portfolio of high quality real estate investments.
Trinity CEO and Chairman Jean Savage added, âWe are delighted to join Wafra as the latest partner of 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.
âWe believe today’s announcement underscores the attractive performance and cash flow attributes of our rail assets. This partnership is an important step in Trinity’s long-term plan to optimize our balance sheet and amplify our return on equity.
Trinity provides rail transportation products and services in North America.
Its TrinityRail platform is deployed to benefit from car rental and management services, as well as car manufacturing, maintenance and modifications.
Wafra is an international alternative investment manager.