Moody’s rates Great Rolling Stock bonds Baa2

Moody's Investors Service said it assigned Baa2 ratings to Great Rolling Stock Co. Ltd.’s £300 million 6.25% senior secured fixed-rate bonds maturing in July 2020, £60 million senior secured floating-rate bonds maturing in December 2023, £400 million 6.5% senior secured fixed-rate bonds maturing in April 2031, £60 million 6.5% senior secured fixed-rate bonds maturing in April 2031 and £500 million 6.875% senior secured fixed-rate bonds maturing in July 2035.

At the same time, the agency assigned a provisional Baa2 rating to the issuer's £4 billion senior secured multicurrency medium-term note program.

The outlook is stable.

The issuer is, indirectly, a wholly owned subsidiary of Willow Bidco Ltd., the parent company of Angel Trains Ltd., the U.K.'s largest rail rolling stock leasing company (Rosco).

Moody’s said the Baa2 senior bond ratings reflect as positives: (a) The size and scale of Angel Trains leasing business as the U.K.'s largest Rosco; (b) a good operating history over 20 years, with very high rolling stock utilization rates; (c) a track record of stable regulation, oversight and support from the U.K. Department for Transport; (d) favorable and defensive market dynamics and a strong long-term passenger growth outlook; and (e) the protective features of Angel Trains' ring-fenced financing structure.

The ratings are constrained by: (a) exposure to train re-leasing risk; (b) the potential for adverse regulatory change; (c) execution risk on the delivery of new assets; and (d) high leverage, the agency added.

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