The joint venture between Gatx Corp. And Brookfield Infrastructure finances part of the transaction with a debt – namely a long -term loan of $ 3.2 billion and a renewable credit facility of $ 250 million provided by a consortium of lenders, especially
David Marks, executive vice-president of
A Wells spokesperson refused to comment more.
The heart of the rental equipment for Wells rail equipment consists of 105,000 wagons, which will be managed by Gatx, based in Chicago, himself a lessor of the leading rail equipment. Brookfield, based in Toronto, one of the largest infrastructure investors in the world, also acquires a portfolio of 23,000 wagons and 440 locomotives from Wells as part of the agreement.
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GATX will manage all the assets included in the agreement. The company will start with a 30% participation in the joint venture, but it is an option to acquire the participation of 70% of Brookfield in the next 10 years.
“This is a truly powerful element of the transaction,” the president and chief executive officer of GATX, Robert Lyons said on Friday at a conference call with analysts. “This allows us to consider our investment over time, ensuring that we can finance our initial participation and our future purchase options via ordinary cash flows and financing activities.”
While Wells has been active in the rental of railway equipment for more than three decades, his involvement was considerably deepened after 2008. First, he acquired First Union Rail as part of his 2008 merger with Wachovia. It extended in 2016 by
Lyons de Gatx described Wells as “a very experienced and sophisticated lessor with a diverse fleet”.
The concentration of the Bank based in San Francisco in freight cars is reprimanded well with the accent put on the existing GATX tanker cars to create a better balanced combined fleet, added Lyon.
“This (Deal) makes Gatx the undisputed leader in this space,” said Paul Titieton, president of the subsidiary of Gatx Rail North America, at the conference call.
The agreement with Wells should conclude in the first quarter of 2026, although Gatx hopes that it can be completed more quickly. “We are all motivated to get there earlier,” said Lyons.
For wells, the sale of its assets of rail equipment is part of a larger simplification trend. The company of 1.9 Billion of dollars actors has reduced its objective on the company’s sectors which, according to it, provides the best way to increased growth and profitability.
“I had the opportunity with this management team, when we came to the company, to decide what we think we adapt and what has not done,”
Wells is the second big bank in the past two years to announce a plan to leave the activity of rental of rail equipment. PNC Financial Services Group concluded an agreement to sell its portfolio of railway car to Amergin Rail in September 2023.
According to GATX, the landlords of railway equipment control approximately 57% of nearly 1.7 million rail cars in North America. Financial institutions are traditionally active in the company, and a number of them remain it – the most important