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Element & Trinity Industries Announce $1B Extension of Railcar Alliance

October 15, 2015, 07:05 AM
Filed Under: Rail Transportation

Trinity Industries, through its wholly-owned subsidiary, TrinityRail Asset Management Company, LLC (“TRAMCo”) announced the extension of its strategic railcar alliance with Element Financial Corporation. Under the extended alliance, Element is expected to acquire up to an additional $1 billion of leased railcars during the period of 2016 through 2019.

Similar to past purchases by Element under the existing alliance, the portfolio is expected to consist of new railcars from Trinity’s leased railcar backlog and existing leased railcars from the Trinity Industries Leasing Company (“TILC”) fleet; the portfolio may also include secondary market purchases of leased railcars identified by Trinity and Element. TILC will continue to act as exclusive servicer for the leased railcars purchased by Element under the alliance, maintaining its relationship with the individual lessees, and receive management fees accordingly.

At this time, the amount of expected sales to Element in each year of the extended alliance has not been determined. Consistent with the existing alliance, sales are expected to be reported in both the Rail and Leasing and Management Services Groups. Macquarie Capital advised Trinity on this alliance.

“We believe the long-term extension of our successful alliance with Element further strengthens our unique railcar investment vehicle platform,” said D. Stephen Menzies, Trinity Industries, Inc. Senior Vice President and the Group President responsible for Trinity’s railcar manufacturing and leasing businesses. “In recent years, the addition of institutional investors and strategic partners, like Element, enhance our financial flexibility to further grow our managed lease fleet,” added Mr. Menzies.

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