1993 financial guide to equipment leasing - includes leasing resource directory - A Railway Age special section

Railway Age, June, 1993 by Anthony D. Kruglinski, Michael Downey Rice

What about coal equipment? Chicago's RESIDCO is probably the most focused player in this market (although they're also a player in other car types.) But at about 1,500 cars of all types in their fleet, they'd be the first to admit that they pale in comparison to large players like GATX, U.S. Leasing, and GE.

Does this mean RESIDCO can't do large deals? No, but it probably means that they won't be doing 500 cars with one customer for their own account. Instead, they'll arrange the transaction for a large equity player or act as an advisor for the user of the equipment. Cincinnati's David J. Joseph Company is another firm specializing in coal (and steel industry) equipment. And since Joseph is an affiliate of one of the largest scrappers in the world, it has the ability to become involved in large transactions and the opportunity to look through the immediate utility of older railcars to their scrap values.

Boxcars? Clearly the king of the hill in this car type is General Electric Railcar Services. They have the financial muscle and stamina to make investments in the future. Other players? Greenbrier Leasing on the west coast, and two smaller eastern and midwestern players: Interail and Railcars Ltd.

Intermodal? Assuming one recognizes that no one comes close to TTX's presence in the intermodal railcar marketplace, the other major player would be Greenbrier, who with its manufacturing affiliate Gunderson play an important industry role.

Grain cars? There are a number of parties with large, active lease fleets. The largest is GE, others include U.S. Leasing, GATX, Chicago Freight Car, and leasing affiliates of some of the larger shippers.

Who is the hungriest cat on the block? Ford's U.S. Leasing has been prevailing in much of the recent bidding for existing lease fleets and is in a growth mode. GATX has also been in the fleet acquisition business of late. (We haven't discussed captive lessors of the major manufacturers unless they're actively in the third-party business with equipment not of their own manufacture.)

CitiRail

CitiRail tells us that it continues to be the largest bank-owned rail lessor with a fleet of roughly 15,000 cars and 150 locomotives, including finance and operating leases. Unlike many lessors that specialize in either finance or operating leasing, it offers both finance and operating lease products covering short and long tenures on net or full-service terms. CitiRail was an early participant in the growing market for rebuilding of general purpose freight cars. To date, they have completed successful programs for grain cars, boxcars, and gondola cars that have extended useful life, improved reliability, and reduced operating costs for their customers.

While active in bidding for widely offered transactions in the market, CitiRail has found success in specialized opportunities that involve significant equipment investment coupled, where appropriate, with customized corporate finance-oriented structures.

Chicago Freight Car Leasing Co.

Chicago Freight Car is a privately owned and operated full-service lessor with 65 years of railroading experience. Its railcar fleet contains over 3,700 covered hopper cars ranging in size from 3,000 to 5,850 cubic-foot capacity. The average age of this fleet is 13 years.