Abrdn, Rock Rail in major European rail investment

Abrdn Core Infrastructure and Rock Rail said they have delivered their first European investment together following financial close of the financing of new electric trains for the Main-Weser Network in Germany.

“The deal is the fifth that Abrdn and Rock Rail have closed together with this latest transaction being equity funded by Abrdn’s second Core Infrastructure Fund, SL Capital Infrastructure II SCSp, a €669 million vehicle,” said Abrdn.

“The Core Infrastructure team at Abrdn manages a diversified portfolio across Finnish district heating and regional energy, German and Belgian liquid bulk storage, UK fibre, Polish solar and UK and German rolling stock.

“MEAG is acting as exclusive arranger of the entire senior debt financing, allowing investors of Munich Re Group and other institutional investors to participate in this transaction.”

MEAG is the asset manager of Munich Re and ERGO.

The new electric fleet will comprise of 17 multiple train units based on the Coradia Stream train platform delivered by Alstom in their Salzgitter factory in Germany and will support thousands of jobs across the global supply chain.

“Consisting of 13 four-car and 4 five-car units, the fleet will enter service from December 2024 and will be initially leased to DB Regio for a period of 14 years, with a 1-year extension option,” added Abrdn.

“On behalf of Rhein-Main Verkehrsverbund GmbH (RMV), DB Regio will run the new trains on Germany’s Main-Weser Network, operating between Frankfurt, Giessen, Marburg and Kassel.

“The four-car version consists of two double-deck control cars and two single-deck middle cars, for a total of 420 seats. The five-car version has another double-deck middle car and a total of 540 seats.

“The fleet will provide a step-change increase in seat capacity by 15% and a significant improvement in the passenger experience, helping to encourage greater use of rail over other, less environmentally-friendly modes of transport.”

Nick Flynn, Investment Director, Abrdn, said: “This represents the fifth major investment in rolling stock for the Core Infrastructure team and first rolling stock transaction outside of the UK, further solidifiying abrdn’s position as a major owner and funder of rolling stock.

“We are committed to delivering safe and reliable essential infrastructure to local communities and we appreciate all the parties’ involvements and efforts.

“We look forward to building the next chapter of the Main-Weser network along with our partners.

“This is an exciting transaction, being our first European rail investment and it also underpins a key strategic priority for abrdn to grow our core capabilities in real assets.”

Rock Rail CEO Mark Swindell said: “Winning and closing Main-Weser is a very significant milestone for Rock Rail, it represents over 3 years of development work from Rock Rail and abrdn culminating in opening up the German market to institutional led finance.

“Competitive institutional finance can be delivered to meet the need to finance new fleets to the German market and provide added value to municipal clients and Operators like Deutsche Bahn.”

Benjamin Hemming, Head of Infrastructure Debt, MEAG, added: “Arranging the senior debt financing for the Main-Weser network underpins our ambition to substantially contribute to the modernisation of sustainable public transport in Germany including project finance schemes.

“The technically advanced features of the new fleet will allow state-of-the-art passenger experience, increased capacity and an improved environmental footprint. With this innovative private placement we are enabling our institutional clients to participate in a long-term financing at attractive commercial terms.”

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Mark McSherry
Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.