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July 1, 2010updated 12 Apr 2017 4:22pm

Lessors to benefit from opening up of market

The rail market in continental Europe is not dominated by a handful of roscos, but populated with a large number of funders writing business across a range of countries

By Claire Hack

Full recovery in rail finance due within two years.


The rail market in continental Europe is not dominated by a handful of roscos, but populated with a large number of funders writing business across a range of countries. Included are independent companies as well as major banks such as HSH Nordbank, DVB Bank and Dexia.

Indeed, the UK market is treated separately to the rest of Europe by many funders, with its own set of idiosyncrasies and challenges.

While most operators in Britain are private – for example, Virgin, Crosscountry, National Express – much of Europe is still under the control of national rail operators like SNCF in France, SNCB in Belgium, and Deutsche Bahn in Germany.

Little rolling stock business is done in France, according to Bertrand Bocris, asset finance manager at Dexia Credit, because of the dominance of national rail operator SNCF.

He said: “We do not see much opportunity in the French market because of the pre-eminence of SNCF – their financial needs are met by bonds. They have the AAA rating of the French state. The only opportunities in France are in regional transport and these are mainly financed by French tax leases.

“It is something we used to do before the crisis but we stopped in October 2008.”

In Germany, he added, Dexia is continuing to focus on specific operating lease transactions, rather than lending to roscos, something it does in other countries.

It is, he conceded, difficult for roscos to gain access to capital. In addition, he believes that the constraints on the market will not ease within the year – although he does forecast recovery after two years.

“After that, it will be logical to see growth for the next five to six years,” Bocris said.

In terms of public sector control, the market in the Benelux countries is among those beginning to open up, according to Frank Hermandung, senior vice-president of the rail finance division of HSH Nordbank.

The Italian market is also opening up with the advent of Nuovo Trasporto Viaggiatori’s (NTV) plans for a privately operated high-speed network, while Germany remains the most independent, along with the UK.

He said: “Germany is still among the most independent We are in all of Europe, though, and even Eastern Europe, although that’s more on the freight side, and to a lesser extent on the diesel multiple unit [DMU] and electric multiple unit [EMU] passenger equipment side.”

Fennema added that HSH has a presence, particularly in freight, in Hungary, Poland and the Nordic region.

He said: “So far this year, we are still cautiously optimistic – there is more activity in the market, but to be honest, it is more in refinancing than facilities for new builds or for capital expenditure.”

Other players, such as Deutsche Bank and Alpha Trains, also hold a substantial share of the market, with Alpha filling the role of rosco more or less throughout Europe.

The company has been present in the market for the last 10 years after splitting from Angel Trains and has offices in London, Antwerp, Cologne, Luxembourg and Madrid.

A source at Alpha Trains said: “We have passenger trains in Germany, Denmark, and the Czech Republic.

“On the freight side, we are pretty much everywhere – we have contracts in Poland, Germany, Austria, Italy, Luxembourg, Spain, Portugal, France, Belgium and Norway.”

The source added that, in terms of leasing locomotives, the company has approximately a 50% market share across Europe, while in terms of passenger stock, the figure is more like 70%.


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