Rail finance—leasing and maintenance arrangements
Produced in partnership with Bryan Cave Leighton Paisner LLP
Rail finance—leasing and maintenance arrangements

The following Banking & Finance guidance note Produced in partnership with Bryan Cave Leighton Paisner LLP provides comprehensive and up to date legal information covering:

  • Rail finance—leasing and maintenance arrangements
  • Leasing arrangements
  • Soggy leases
  • Maintenance arrangements

Once a rolling stock lessor has taken delivery of rolling stock from the manufacturer, its priorities will be to:

  1. lease it to an operator (in order to generate income and thereby recover the cost of its investment in that rolling stock), and

  2. ensure that arrangements are in place for that rolling stock to be properly maintained (to preserve its value and ensure its marketability for re-leasing upon termination or expiry of the initial lease)

This Practice Note outlines the types of operating lease typically considered by a lessor for leasing passenger rolling stock to an operator in the UK. It also outlines the different types of maintenance arrangements that might be put in place in respect of that rolling stock. Consistent with market practice for the procurement and leasing of the majority of passenger rolling stock in the UK, this Practice Note assumes that the lessor is an operating lessor and will lease the rolling stock to an operator on an operating lease basis.

Leasing arrangements

Operating leases

A lease agreement of rolling stock involves the lessor granting the operator (as lessee) the right of possession and use of that rolling stock for a specified period in exchange for the operator paying rent to the lessor and complying with the other terms and conditions of the lease agreement.

In the UK,

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