Wafra Gets into U.S. Rail Car Investing with Trinity Industries’ Deal
Posted on 08/20/2021
Trinity Industries, Inc., headquartered in Dallas, Texas, owns businesses that are providers of rail transportation products and services in North America. Trinity Industries formed a Railcar Investment Vehicle (RIV) with Wafra Inc. and certain funds managed by Wafra. The RIV program will invest in diversified portfolios of leased railcars originated by Trinity Industries Leasing Company targeting up to US$ 1 billion in total acquisitions over an expected three-year investment period.
The RIV program is structured as a new joint venture, Signal Rail Holdings LLC (Signal Rail), between Wafra Funds and Trinity, with Wafra Funds owning 90% and Trinity Industries Leasing Company owning 10% of Signal Rail. TILC will continue to service all railcars owned by Signal Rail.
In connection with the launch of the RIV program, Signal Rail has acquired an initial portfolio of approximately 3,600 railcars (the “Initial Portfolio”), representing a diverse pool of on-lease railcars from Trinity Industries Leasing Company’s leased railcar fleet. Signal Rail financed the acquisition of the Initial Portfolio through SRL 2021-1, an asset-backed securitization comprising US$ 265 million in two classes of notes rated by S&P and KBRA. The acquisition of the Initial Portfolio by Signal Rail, and the closing of SRL 2021-1, were both completed on August 18, 2021. Trinity Industries expects the sale of the initial portfolio of railcars described will result in sales proceeds of approximately US$ 325 million and gains on lease portfolio sales of approximately US$ 28 million – US$ 32 million, with on-going fee revenue to be earned from servicing the railcars.
Wafra is owned by Kuwait’s Public Institution for Social Security (PIFSS).