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Mitsubishi UFJ Lease & Finance to Buy $1B in Leased Rail Cars

May 23, 2014, 06:45 AM
Filed Under: Rail Transportation

The Greenbrier Companies, Inc. has entered an alliance with Mitsubishi UFJ Lease & Finance (MUL) through its subsidiary Greenbrier Leasing Company (GLC). MUL plans to acquire a portfolio of about $1 billion in leased railcar assets, both new and used, through the alliance with Greenbrier over a multi-year period. MUL has already commenced its acquisition activities and is expected to have secured in excess of $100 million in railcars by August 31, 2014. Greenbrier will also provide equipment management services for these railcar assets in support of MUL. The alliance builds on Greenbrier's current relationship with MUL and longstanding commercial and financial relationships with other Mitsubishi UFJ Financial Group affiliates.

This alliance is consistent with Greenbrier's strategy to reduce the amount of long term capital invested in its leasing business while driving more volume through its lease underwriting, syndication and asset management model, working with a select network of business partners and investors. The alliance is designed to create momentum for MUL's rail portfolio acquisition strategy and rail car leasing business. The alliance with MUL connects GLC's expertise in railcar leasing and asset management services with MUL's reputation as a global leader in equipment finance, leasing and management across many asset classes. MUL is a key addition to a growing group of sophisticated leasing partners who engage with Greenbrier to originate and provide management services for high value transportation and energy related investments.

Through relationships like these, GLC has grown its leasing, underwriting, syndication and asset management business from less than $100 million in underwriting and syndication volume in fiscal 2011 to a projected total transaction volume of approximately $425 million in fiscal 2014. GLC is on pace towards its goal of doubling its aggregate annual transaction volume to $1 billion over the next several years.

"Greenbrier has a long and successful history of creating prosperous operating joint ventures, and partnering with customers, suppliers, and investors to our mutual benefit," said William A. Furman, Chairman and CEO. "Our leasing and management services businesses continue to innovate and grow their offerings to serve a broad range of customers including leasing companies, shippers, railroads, investors and financial institutions. Currently the scope of our management services activity extends to almost 234,000 railcars. Our commitment to increasing our manufacturing capacity and expanding our range of products enables us to continue to serve those customers which purchase equipment directly, while expanding and diversifying our market reach through our partner network."

"We are delighted to partner with MUL which shares GLC's long-term view regarding the advantages of being in the business of North American rail leasing, supported by a robust service infrastructure. This is a natural extension of Greenbrier's developing relationship with MUL," said J.T. Sharp, president of GLC. "The Leasing & Services strategy we've undertaken is central to Greenbrier as it strengthens our integrated business model and creates synergies with both our Manufacturing and our Wheels, Repair & Parts businesses."

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