USA: Wagon manufacturer The Greenbrier Companies and transport asset advisory and management firm Longwood Group have announced plans to form a wagon leasing joint venture in the first quarter of this year.
GBX Leasing’s initial portfolio will be based on leased wagons on Greenbrier’s balance sheet or in its backlog, and it will acquire approximately $200m of newly-built and leased wagons per year from Greenbrier.
Greenbrier will have a 95% stake, and will provide lease originations, remarketing and administrative services. Longwood will provide strategic and investment guidance, portfolio management and management oversight.
‘Today’s announcement is a logical bolt-on to Greenbrier’s leasing platform and commercial strategy’, said Greenbrier CEO & Chairman William A Furman on February 5. ‘The railcar portfolio built by GBX Leasing will create a new annuity stream of tax-advantaged cash flows while reducing Greenbrier’s exposure to the new railcar order and delivery cycle.’
The joint venture will be financed with non-recourse debt and is expected to be levered about 3:1 debt to equity. A separate, initial $300m warehouse debt facility will be established to facilitate the joint venture’s activities.
The initial equity investment is tax-advantaged as a result of the five-year net operating loss carryback provision in the Coronavirus Aid, Relief & Economic Security Act, bonus depreciation and the MACRS depreciation system.