Citicorp Structures Cross-Border Leveraged Lease For Tranz Rail; SSB, Citicorp Help New Zealand's Largest Rail Company Finance New Acquisition.

NEW YORK--(BUSINESS WIRE)--Dec. 22, 1998--Citicorp Global Equipment Finance Group today announced the closing of a $55 million Cross-Border US Leveraged Lease for Tranz Rail Holdings Limited, the largest rail passenger and freight haulage company in New Zealand.

The deal, a landmark lease transaction for one of New Zealand's largest public companies, represents another successful collaboration of Citigroup's Citicorp and Salomon Smith Barney.

The leveraged lease, as structured by Citicorp, allowed Tranz Rail to finance the acquisition of a new rail, vehicle and passenger ferry, the "ARATERE", at a cost significantly lower than that of an outright debt financing. The company financed 100-percent of the acquisition cost and retained full operating control of the asset. A purchase option in the lease also gives the company the flexibility to realize any upside gains in the market value of the ship.

"Citicorp's leveraged lease solution for financing the "ARATERE" met all our needs and offered substantial financial benefits," said Ronald Russ, Executive Manager and Chief Financial Officer, Tranz Rail. "We were able to get the best shipping finance experts in the business to structure the deal, while having Salomon Smith Barney place the debt in the U.S. private placement market."

"The deal allowed us to leverage the product leadership of Citicorp and Salomon Smith Barney, pulling together our expertise in the U.S., New Zealand and Australia," said Ravi Dandapani, head of Global Origination for Shipping Finance at Citicorp. "We hope to replicate the structure for other foreign transport companies seeking to finance large-ticket assets cost-effectively."

With a global portfolio of over $8 billion, Citicorp Global Equipment Finance is the largest U.S.-bank owned leasing company and a leader in global asset and equipment finance. Acting as either a principal or an adviser, Citicorp provides a broad range of funding solutions to customers in transportation, material handling, technology, power and energy, construction, energy management, quick-service restaurants, automotive services, telecommunication, and other industries. By leveraging the bank's global leadership in foreign exchange, derivatives, and securitization with its on the ground presence in 100 countries, Citicorp continues to deliver expert asset and equipment financing solutions to customers throughout the world.