Moody’s rates Eversholt bonds Baa2

Moody's Investors Service said it assigned Baa2 ratings to Eversholt Funding plc’s £300 million 5.831% senior secured bonds due 2020, £400 million 6.359% senior secured bonds due 2025, £400 million 6.697% senior secured bonds due 2035 and £400 million 3.529% senior secured bonds due 2042.

The outlook is stable.

The Issuer is, indirectly, a wholly owned subsidiary of Eversholt UK Rails (Holding) Ltd., the parent company of the Eversholt Rail group of companies. Eversholt Rail is one of the three incumbent rail rolling stock leasing companies.

Moody’s said the Baa2 senior bond ratings reflect as positives: (a) The stable and predictable nature of Eversholt Rail's passenger train leasing revenues; (b) limited operational risk; (c) a track record of stable oversight and support from the U.K. Department for Transport (DfT), albeit tempered by recent franchising developments; (d) a strong long-term passenger growth outlook; (e) the creditor protective features of Eversholt Rail's ring-fenced financing structure; and (f) a Moody's expectation of willingness and capacity of Eversholt Rail's owner, CK Hutchison Holdings Ltd. (A2 stable), to support Eversholt Rail, if required.

At the same time, the ratings are constrained by exposure to train re-leasing risk and high leverage, the agency explained.

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