advertisement

---

Despite a soft economy, North American railroads remain active in the rolling stock market.  As evidence, financial services law firm Chapman and Cutler L.L.P. recently announced it has advised on transactions worth more than $3.5 billion so far in 2007-08.

Last year, the firm — which represents Class Is in lease and pass-through financings of locomotives, rail cars and intermodal facilities — helped clients in 26 separate leveraged lease financings involving more than $1.7 billion worth of locomotives and equipment, including coal, grain, box and refrigerated cars, and intermodal containers.

Economic factors are well aligned in rail's favor, such as strong growth in coal volume, agricultural exports and international trade, Chapman and Cutler said.

"The continuing spikes in fuel and labor costs have put trucking firms at a disadvantage to other forms of transportation," said Michael McGee, who heads the firm's rail finance group, in a prepared statement. "In particular, rail operators win any price comparison hands down when measured against other means of long-haul commercial transport within North America."

Railroads also are benefiting from increasing demand on businesses to reduce fossil fuel emissions.

"Today's trains leave a smaller carbon footprint per mile for the amount of goods they carry," said McGee. "Even in the face of the ongoing tightness in the credit markets, there appears to be considerable investment appetite among investors for rail equipment financings."