This deal is a first for transport financing because Dresdner Kleinwort Benson has agreed to finance the manufacture of rolling stock before a train operator has been found to buy it. Dresdner will fund Alstom's manufacture of 200 passenger rolling stock vehicles for the London commuter market.
This, according to Clifford Chance transport finance partner Gavin Teague, is a sign of evolution in the rail finance market. Banks have not been willing to look at such deals before but now, because of the obvious shortage of rolling stock, they are considering it.
Teague led the Clifford Chance team after being approached by Dresdner, for which he has already done a number of transport financings. He has also carried out infrastructure and rolling stock financing work for Alstom, which came in useful on the transaction. He was assisted by Timothy Lipscombe from the firm's asset finance group and partners Etienne Wong and Michael Ehrlich.
Teague was instructed in October last year on the deal, and the initial structuring discussions took six months before the transaction got under way.