Aviva Investors competes financing of new Avanti West Coast InterCity trains
Aviva Investors is to provide over GBP200 million of debt-financing, on behalf of Aviva UK Life and other third-party clients, towards a fleet of new rolling stock for the West Coast Partnership rail franchise, which will operate under the new ‘Avanti West Coast’ rail service, on one of the UK’s busiest rail lines.
The fleet of Hitachi trains, which comprises 135 vehicles and is based on bullet train technology, will be quieter and greener than the rolling stock they replace and are expected to reduce carbon dioxide emissions by 61 per cent across the franchise. The ten seven-carriage electric units and 13 five-carriage electric-diesel bi-mode trains are scheduled to enter service from 2022, and will connect North West England, North Wales and the Midlands with London.
The transaction represents Aviva Investors’ third rail industry deal in 2019. It follows the provision of senior debt financing towards a new fleet of trains for the rebranded East Midlands Railway franchise in August, and committing to the €1.45bn senior debt facility for Beacon Rail in July, which helped refinance existing facilities and provide expansion funding to the business.
Sinéad Walshe, Director, Infrastructure Debt at Aviva Investors, says: “This deal further demonstrates Aviva Investors’ commitment to modernising key UK transport infrastructure and improving social connectivity. The new fleet, comprising of both bi-mode and electric trains, will help support the UK’s drive for a more carbon-efficient economy, provide much-needed additional capacity to the West Coast mainline and improve the experience for passengers. We believe the transaction provides a high-quality investment that is well-aligned to our clients’ investment criteria.”
Angela Darlington, Interim CEO of Aviva Life and Pensions, adds: “Aviva sees the provision of higher-quality, lower-emissions trains as a key component of the development of a long-term sustainable transport infrastructure for the UK. We are delighted to have followed up our investment earlier this year in the new East Midlands fleet with this latest commitment to the sector through the West Coast mainline rolling stock upgrade. We are particularly pleased that the manufacture of these trains, at Newton Aycliffe in County Durham, will support the local economy in the north-east of England, while the long-term cashflows arising from this investment will help us to meet our commitments to Aviva’s individual and bulk purchase annuity customers.”
Rock Rail and Aberdeen Standard Investments acted as equity partners on the transaction.
Mark Swindell, Chief Executive Officer, Rock Rail, says: “Rock Rail is delighted to be partnering with Aviva Investors to deliver these state-of-the-art trains to the West Coast Partnership franchise. We look forward to continuing this long-term partnership which over the last 4 years has seen Aviva Investors as the major debt funder in nearly £3 billion worth of new Rock Rail fleets. These new fleets are transforming the quality of rolling stock for the benefit of passengers all over the UK, replacing some of the oldest trains in the country and positively contributing to a greener, more sustainable UK railway.”