Legal & General Provides $260MM to Support UK Transport Infrastructure

Legal & General provide £200 million ($260 million) in long-term debt financing to support the purchase of new rolling stock for the Wales & Borders franchise by Equitix and SMBC.

The firm did this on behalf of its clients, including Legal & General Retirement Institutional (LGRI).

This transaction marks Legal & General’s fifth investment in the sector, increasing its exposure to transport and demonstrating a continued commitment to UK infrastructure, while complementing Legal & General’s wider commitment to the £450 million regeneration of Cardiff Central Square.

Legal & General is additionally helping to finance a new fleet of 60 trains for the Core Valley Lines in and around Cardiff, Wales, representing a significant investment in new rolling stock for Wales.

The CVL element comprises 36 light rail overhead electric and battery powered trains, and 24 diesel, battery and overhead electric trains, both to be manufactured by Stadler, a privately-owned manufacturer based in Switzerland.

The new CVL fleet is scheduled to enter operations in 2024 and benefits from a 25-year Usage Undertaking provided by Welsh ministers. The new Wales & Borders rolling stock fleet will be a critical part of delivering increased capacity for a rail service in and around Cardiff, particularly the CVL Metro route which sees utilisation higher than the UK average.

The new metro fleet will replace an ageing diesel fleet, resulting in lower emissions on these lines. Similarly, the tri-mode trains will replace existing old diesel rolling stock and will have the capability of being powered by electric overhead lines, battery or diesel engine, supporting a shift away from all-diesel powered operations.

Tom Sumpster, head of Infrastructure at LGIM Real Assets, said, “We are pleased to be financing the purchase of new rolling stock for the Wales & Borders franchise, helping to provide cutting edge transport with lower carbon emissions in Wales and to be a part of growing transport links between England and Wales. Despite the current political backdrop, this deal is testament to our commitment to UK infrastructure. These are unprecedented times, and only those who are forward thinking and able to flex to the changing political and economic backdrop will prosper.”

Established in 1836, Legal & General is one of the UK’s leading financial services groups and a major global investor, with a number of growing businesses in the U.S.

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