The Grand Est Region acquires the TER trains circulating in its territory
Crédit Agricole Group is supporting the Grand Est Region and Grand Est Mobilités in financing the acquisition and modernisation of approximately 200 regional express trains (TERs) for a total of nearly €1.2 billion, of which €190 million financed by the Crédit Agricole Group.
As part of the opening up of passenger rail services to competition (subsequent to the French law for a new rail pact of 27 June 2018), the Grand Est Region, as the Public Transport Authority, has decided to acquire the TER trains circulating in its territory from SNCF Voyageurs.
To that end, the Grand Est Region has set up a local public company (société publique locale, SPL), Grand Est Mobilités, of which it is the main shareholder, to manage the trains of the Grand Est Region and finance the acquisition and maintenance of the TER fleet. The Region and the SPL have implemented a 42-year concession agreement to subsidise the costs of the SPL over the period in exchange for the payment of an amount corresponding to the book value of the trains.
In that context, SPL raised a structured financing of €1.2 billion, provided by a pool of lenders composed of the European Investment Bank (EIB), Caisse des Dépôts et Consignations (CDC), an institutional investor, and five commercial banks including the Crédit Agricole Group (the financing was provided by CACIB, the Alsace-Vosges Regional Bank, the Champagne-Bourgogne Regional Bank, the Lorraine Regional Bank and the Nord-Est Regional Bank).
CACIB played a leading role in structuring this transaction, acting in particular as:
- Arranger
- Hedging Bank
- Hedging Coordinator
- Facility and Security Agent
- Account Bank
As part of the opening up to competition of passenger transport in France, this is a strategic transaction for the Grand Est Region on several counts:
- it is the first French region to implement this type of structure to finance and manage its TER fleet, and the model will probably be reproduced by other regions,
- with transport accounting for one-third of the budget of French regions, setting up a financing structure enabling the region to meet its future expenses at a competitive cost is essential and ensures fairness between all rail operators.
By promoting public transport as an alternative to the use of cars, this transaction is part of the Group’s societal project and illustrates:
- the leading position of Crédit Agricole CIB’s Rail franchise in rail financing in Europe and France with this initial significant financing transaction as part of the opening up of the market to competition.
- the Group’s ability to support innovative projects at the local level with the participation of the four Regional Banks with Crédit Agricole CIB: Alsace-Vosges, Champagne-Bourgogne, Lorraine and Nord-Est, onboarded from the start of the consultation by the midcaps division.
Créer un premier titre de bloc
“Crédit Agricole is delighted to contribute to the ecological transition by financing the TER fleet of the Grand Est Region. This innovative transaction reaffirms our position as a leader in rail financing in Europe and a major player in financing French territories through our support for the Grand Est Region with the intervention of the Regional Banks.”
Michel Cusenza
Executive Director, ERA Rail Finance Group
“We are delighted to have been able to support the Region and the Grand Est metropolitan areas, especially as the project led by the Grand Est Mobilités SPL already stands as a benchmark in the opening up of TERs to competition. With the Crédit Agricole Group having recently celebrated 100 years of financing for public authorities, it is once again demonstrating, through its universal banking model, its ability to support the major transformations of the regions.”
Alexandre Vedel
Senior banker, Midcaps division
"This operation is a good example of the Crédit Agricole Group's ability to respond to the challenges of transition and to be useful to its territory. It also demonstrates its expertise in the transport sector. The creation of SPL Grand Est Mobilités enables the Grand Est region to make a sustainable investment in rail transport, thereby reducing the greenhouse gas emissions associated with the travel of its inhabitants. It also facilitates their access to jobs and services. "
Thomas Dutot
Head of Specialised Networks, Crédit Agricole Alsace Vosges
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