International law firm Freshfields Bruckhaus Deringer has advised HSBC Rail UK Limited in connection with the restructuring and refinancing of its UK rail leasing business, Eversholt Rail, leading to its £2.1bn sale to a consortium of infrastructure funds – 3i Infrastructure, Morgan Stanley Infrastructure Partners and Star Capital Partners.
The transaction involves an innovative combined bank and bond acquisition financing off a common security platform which is planned to be available for contemporaneous drawing at the time of closing the sale. It has been a challenging transaction, combining acquisition financing requirements with a longer term bond financing, building on techniques developed in the context of the utility and BAA financing transactions and has set a new standard for future acquisition financings involving simultaneous bank and capital markets debt for major businesses with stable cashflows and defined assets.
Freshfields fielded a multi-practice team led by corporate partner Farah Ispahani and finance partner Marcus Mackenzie, assisted by corporate associates James Scott and Anna Cooklin, senior finance associate Nick Stainthorpe and finance associates Dan Tobias, Sebastian Reger, Lorena Wong and Stanislav Lysikov.
Finance partner Simon Hall led the restructuring team and was assisted by senior finance associates Derek Watson and Rachel Jones, and associates Richard Walton, Andrew Flanagan and Christopher Jones. Tax advice was provided by partner David Taylor and associates Peter Clements and Sarah Perfect.
Commenting on the transaction, Marcus Mackenzie said ‘This has been a massive team effort across the corporate, finance and tax teams to deliver a multi-faceted deal for our client. In combining both bank and bond debt to finance the acquisition, the deal has set a new benchmark in these continuing uncertain credit times, and we are proud to have been able to assist our client and the purchasers to achieve their commercial goal.’
