Porterbrook completes £250m refinancing in landmark issuance

Porterbrook has successfully refinanced its October 2020 public bond with a mix of existing and new investors

Dual issuance funding sourced from the Samurai and Private Placement markets

First UK rolling stock leasing company to raise a Samurai loan and issue a Green Private Placement

Porterbrook, one of the UK’s leading train leasing companies, is delighted to announce the successful refinancing of its £250m, October 2020 public bond, locking in low funding costs 12 months ahead of the bond’s maturity.

The bond has been refinanced through a dual track issuance in both the Private Placement and Samurai markets, the latter comprising Japanese institutional investors. A £100m Samurai Loan has been raised from a syndicate of four institutional investors in conjunction with a £150m Private Placement, issued under Porterbrook’s Green Framework. A group of US, Swiss and Canadian institutional investors participated in the Private Placement. Specialist consultant DNV GL have verified that Porterbrook’s Green Framework is in line with ICMA’s green bond principles.

Both facilities were priced at attractive levels, demonstrating the strong demand to lend against stable, long-term assets. The coupons achieved were both significantly below the outstanding public bond, which will further support Porterbrook’s ability to continue to invest into the UK rail sector.

The Loan and Notes were issued by Porterbrook Rail Finance Limited and each rated Baa2 by Moody’s Investors Service.

Stefan Rose, Head of Structured Finance at Porterbrook, said:

“The successful closing of our dual issuance debt raising in the Samurai and Private Placement markets is an important milestone for Porterbrook. We are delighted to have diversified our funder base into the Japanese institutional investor market and secure such strong support from another pool of liquidity. Combined with our long-standing relationships in the Private Placement market, who have supported us over many years across various transactions, we have achieved a strong result for all parties."

“The appetite for the transaction supports the role of Porterbrook within the UK rail market, with investors recognising the value we add in innovation and maintenance of our rolling stock fleet across the network."

“Our balance sheet remains in an extremely strong position to support our ongoing investments in both new fleets as well as in the upgrade of existing stock."

“Porterbrook continues to be at the forefront of ensuring that the UK rail sector meets its decarbonisation targets. The issuance of this Private Placement, under our Green Framework, is a landmark transaction in the UK rail sector and is further recognition of the work that Porterbrook is undertaking in this space.”