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July 21, 2017  

Railcar Builder Readies Financing Program

One of the largest railcar manufacturers in the U.S. is positioning itself as a routine issuer of asset-backed bonds.

American Railcar Industries’ offerings would be backed by leases written through an in-house financing unit that launched in June, and could start flowing as soon as October. As part of the push, the St. Charles, Mo., company has been talking to banks including Credit Suisse and Morgan Stanley about supplying warehouse lines and underwriting the deals.

Leading the discussions is American Railcar Industries chief financial officer Luke Williams, who also will meet with investors and rating agencies at Information Management Network’s “ABS East” conference. That event runs Sept. 17-19 at the Fontainebleau hotel in Miami Beach.

American Railcar Industries’ lease program previously was run by an unaffiliated operation called American Railcar Leasing, which presumably has packaged some of those receivables into its own asset-backed bond deals. That company has completed three securitizations totaling $1.2 billion since entering the market in 2012. Most recently, it sold $625.5 million of bonds in January 2015 with Bank of America, Credit Agricole and Credit Suisse running the books.

The launch of American Railcar Industries’ in-house program coincided with a deal that saw Icahn Enterprises sell American Railcar Leasing to Sumitomo Mitsui Banking.

American Railcar Industries specializes in building tanker cars and hoppers, which are used to transport loose bulk commodities. Its lease fleet currently encompasses some 12,000 railcars.

Among securitization professionals, the hope is that American Railcar Industries’ moves could help the market for railcar-lease securities out of a recent slump. No deals have priced in the asset class since May 2016, although Trinity Leasing was working with Credit Suisse this week to place a $238 million transaction — its first since 2014.

All told, three railcar-lease securitizations totaling $833.5 million priced in 2016, according to Asset-Backed Alert’s ABS Database.