BRITISH rolling stock leasing company Angel Train Contracts was sold on December 19 to Royal Bank of Scotland by the GRS Holdings consortium of Nomura International, Babcock & Brown and Prideaux & Associates which bought it debt-free from the government in November 1995 for £696m. Debt funding worth £690m for the purchase was securitised by Nomura through a bond issue, with security provided by revenue from existing rolling stock leases which expire in 2003-04 and are 80% underwritten by the government.

The £395m cash sale to RBS was significantly higher than City valuations of £300m; an extra £13m may be paid as deferred consideration depending on Angel’s success in winning contracts for new rolling stock up to the end of 1999. ATC is preferred lessor of electric multiple-units to Regional Railways North East, and has the right to fund half of the planned Virgin Rail inter-city fleets.

Angel will continue to be run by its existing management, as a separate entity within the RBS Corporate & Institutional Banking business. RBS expects Angel to invest £1·5bn in rolling stock over the next 10 years. o