Allen & Overy said today that the EUR1.25 billion secured corporate refinacing of Alpha Trains, Europe’s largest and most diversified privately owned specialist train leasing company, marks a milestone for the bank/bond financing space in Europe.

The multi-source debt platform and refinancing structure developed with the help of Allen & Overy’s infrastructure team is the first in Europe outside of the regulated utilities space. The financing is split between EUR1.125bn senior debt and EUR125m junior debt. The senior debt raised by Alpha Trains Finance SA consists of a EUR350 million public bond; a EUR250m senior private placement and EUR525m of term bank loans. A EUR125m junior private placement was also raised by Alpha Trains Holdco Sarl, an intermediate holding company. In addition, EUR225m of liquidity facilities were raised.

The Allen & Overy team was jointly led by partners Jon Bevan and Tim Conduit. Jon commented: “This structuring technology allows Alpha Trains significant funding flexibility and provides certainty for longer term financing through a multi-source platform, which optimises funding costs. It’s a complex deal which required careful management of the various elements, but the structure has delivered the desired effect in a cost-efficient manner. The deal is also a testament to the strength and quality of the A&O network.”

Tim added: “Investment grade multi-source financing platforms are less frequently seen in Europe than the UK, but the clear benefits they represent mean that these bespoke financing solutions are likely to become more prevalent. They allow sponsors and borrowers to really look across the funding mix; from bank debt to public bond issuance to private placements, which have become a much more important part of the funding universe.”

Allen & Overy’s cross-border team in nine different European jurisdictions advised the funders and the joint bookrunners.

Allen & Overy continues to operate at the forefront of developments in the bank/bond financing space in Europe. In particular, the legal practice is focused on the development of a pan-European private placement market and formed part of the International Capital Market Association working group together with a wider range of stakeholders, including the Loan Market Association, to develop standard documentation to facilitate the execution of private placement deals in either loan or bond format.