Basel, Switzerland
8^th May, 2018

EUROFIMA European Company for the Financing of Railroad Rolling Stock
(“EUROFIMA”)

Proposed amendments to Statutes
 

About EUROFIMA

EUROFIMA is a supranational organisation located in Basel, Switzerland. It was established in 1956 based on an international treaty signed by 25 European sovereign states so far (each a “EUROFIMA Contracting State”).

EUROFIMA fulfils a mission to support the development of rail transportation in Europe. It supports its railway shareholders [as well as certain other railway bodies] in renewing and modernising their equipment. EUROFIMA lends the proceeds of its borrowings and equity capital, where relevant, pursuant to loans entered into between EUROFIMA as lender and its railway shareholders as borrowers for the financing of the purchase by its railway shareholders of railway equipment.

Project Horizon

As mentioned in its 2017 Annual Report, EUROFIMA has launched a comprehensive strategy review of its activities with the goal to strengthen its presence in the European market for rolling stock financing.  EUROFIMA anticipates that further liberalisation in passenger railway transportation will create opportunities to promote new lending in public interest railway transportation. EUROFIMA believes it is well placed to take advantage of these opportunities thanks to its public interest mandate, its lean cost base and a historic track record of no losses on its loan portfolio. EUROFIMA expects to attract new customers and new shareholders such as public transport authorities and private transport operators with public service contract mandates.

Proposed amendments to Statutes

EUROFIMA announces today that it has initiated the process to amend its Statutes. The amendments proposed by the Board will clarify the relevant conditions that public transport authorities and private transport operators must fulfil in order to be admitted as shareholders or to have access to loans from EUROFIMA.

EUROFIMA benefits from a range of credit support in respect of the loans it makes to its railway shareholders.  Such credit support includes security over the financed rolling stock, guarantees from the relevant EUROFIMA Contracting States, a guarantee reserve fund that it is obliged to maintain under Article 29 of the Statutes (currently in an amount of CHF 1021 million) and, lastly, a subsidiary shareholder guarantee under Article 26 of the Statutes (the “Article 26 Guarantee”).

It is also proposed that the Article 26 Guarantee will be discontinued in respect of loans provided by EUROFIMA on or after 1 January 2018. In respect of any loan provided by EUROFIMA prior to 1 January 2018, the Article 26 Guarantee will remain in full force and effect.

The proposed amendments will also require EUROFIMA to apply the net proceeds from the Article 26 Guarantee pro rata towards the satisfaction of liabilities and obligations it may have in respect of any borrowing incurred by EUROFIMA prior to 1 January 2018 (the “Existing Borrowings”) that are due and payable at the time such guarantee proceeds are received in priority to any borrowing incurred by EUROFIMA on or after 1 January 2018 (the “New Borrowings”). Pursuant to the amendments, EUROFIMA will also be required to obtain undertakings from creditors under the New Borrowings (the “New Lenders”) that: (i) the New Lender will not, in respect of such New Borrowings, attach, claim, levy or enforce against any guarantee proceeds and/or EUROFIMA’s claim against the shareholders in respect of the Article 26 Guarantee in competition with claims arising out of the Existing Borrowings; (ii) the New Lender agrees that the Existing Borrowings shall be satisfied in priority over the New Borrowings from any guarantee proceeds; and (iii) if at any time any New Lender receives or recovers any guarantee proceeds in contravention of the relevant undertakings, such New Lender must promptly remit such guarantee proceeds received by the relevant New Lender to EUROFIMA for application in accordance with the Statutes.

The Article 26 Guarantee is a several (and not joint) guarantee by the relevant shareholders of EUROFIMA in favour of EUROFIMA for the performance of the borrowers under the loans provided by EUROFIMA. The Article 26 Guarantee is not a guarantee by the relevant shareholders of EUROFIMA in favour of holders of debt instruments issued by EUROFIMA for the performance of EUROFIMA under such debt instruments. Therefore, any impact of the amendment to the Article 26 Guarantee on holders of EUROFIMA’s debt instruments would be indirect and whether the amendment to the Article 26 Guarantee would have a positive or negative impact on the holders of EUROFIMA’s existing and new debt instruments would depend on the precise factual circumstances.

Credit rating impact

EUROFIMA has been assigned a long-term issuer credit rating of AA+ by S&P since 2013 and Aa1 by Moody’s since 2014. While EUROFIMA continues to assess the impact of the contemplated amendments to the Statutes on its credit ratings, it does not expect that the credit ratings of its existing bonds will be changed as a result of the proposed amendments to the Statutes.

Approval process of EUROFIMA

The proposed amendments to the Statutes have been put forward by the Board to be voted on at a General Meeting convened for 5 June 2018. The proposed amendments are still subject to and conditional upon the approval of EUROFIMA’s shareholders. If approved at the General Meeting, the amendments will only become effective following the completion of the proceedings of Article 2 of the Convention for the establishment of EUROFIMA dated October 20, 1955 expected by September 2018.

Further information in relation to EUROFIMA is available at:
www.eurofima.org

For enquiries: 
EUROFIMA European Company for the Financing of Railroad Rolling Stock
Alfred Buder, CEO
alfred.buder@eurofima.org 
Rittergasse 20, 4051 Basel, Switzerland
Phone: +41 61 287 3340
Fax: +41 61 287 3240