MUFG has played a lead role on the first dual track Samurai and green US Private Placement mandate for Porterbrook Rail Finance Limited, facilitating funding worth £250 million to repay a bond maturing in October 2020. MUFG acted as Coordinator, Sole Active Bookrunning Mandated Lead Arranger and Facility Agent on the Samurai Loan and Joint Lead Placement Agent on the US Private Placement (USPP).
Porterbrook is a leading rolling stock owner and lessor in the UK with a current market share of approximately 32% of the UK passenger train leasing market by number of vehicles. The company plans to invest upwards of £1bn into UK rail over the next five years, alongside being committed to ensuring that the UK rail sector meets its decarbonisation targets.
The debut Samurai loan was raised from a syndicate of three institutional Japanese investors and MUFG Bank Ltd. These loans are becoming increasingly popular with borrowers seeking to tap into the regional banks and life insurers in Japan, who are demonstrating increasing appetite to lend outside the Asian region, especially in the broader infrastructure sector. This mandate reinforces MUFG's position as market leading Samurai Loan Arranger and via our extensive Japanese distribution framework has allowed us to develop an untapped pool of liquidity for our EMEA client base.
Although this was Porterbrook's third USPP transaction, it was a unique proposition as it was issued under Porterbrook's Green Framework, assuring alignment with the International Capital Market Association's green bond principles.
Both the Samurai Loan and the USPP were oversubscribed, included delayed funding and issued at competitive rates.
MUFG's lead role further bolstered our strong track record in the broader European rolling stock financing market, having deployed our lending, financial advisory and private placement arranging capabilities in support of our clients in the sector. Most notably, MUFG is the only agent to have acted on the last three rolling stock USPPs for UK Rolling Stock lessors.
Of the three mandates for Porterbrook, the first was a £885m bank facility refinancing transaction completed in June 2018 in which MUFG was a Mandated Lead Arranger and Hedge Provider, and the second was an issuance in the USPP market of £250m Senior Secured Notes in November 2018 on which MUFG acted as Joint Lead Placement Agent and Bookrunner.
Darryl D'Souza, Managing Director, Infrastructure for MUFG in EMEA, said:
“This is our third mandate from Porterbrook, and demonstrates our ability to find solutions for our customers and support businesses over the long-term.
"I am truly excited to be a part of this landmark transaction, which is not only the first ever dual track Samurai and green USPP mandate, but the first European infrastructure company to tap the Samurai loan market and the first rolling stock leasing company in that market.
"Going forward, we aim to build upon our track record in this area, and to continue our efforts in the area of sustainable finance both in the loan and debt capital markets."
Stefan Rose, Head of Structured Finance at Porterbrook, said:
“We are delighted to have worked with MUFG to diversify our funding base into the Japanese institutional investor market and secure such strong support from another pool of liquidity.
"Combined with our long-standing relationships in the Private Placement market, who have supported us over many years across various transactions, we have achieved a strong result for the Company and our shareholders."