National Railroad

GraduateSchool of Business Administration University of Virginia UVA-F-1363 Version 1.5 National Railroad passenger Corporation (AMTRAK): Acela Financing On April 30, 1999, Arlene Friner, CFO of Amtrak, instructed her Treasury put up to review a leveraged lease proposal from the BNY Capital honour LLC (BNYCF). Several weeks prior, Amtrak and its advisor, Babcock & Brown Financial Corporation, had invited financial institutions to submit lease-financing proposals for Amtraks planned purchase of locomotives and high-speed trainsets.1 The equipment would be utilized on the Acela line, Amtraks new brand that was designed to differentiate Amtrak passenger trains and service in the Northeast corridor from the existing service.2 Acela, scheduled to stupefy service in late 1999, promised to offer faster dockage times and premium service (see Exhibit 1). Arlene and her staff had avoid over the proposals and agreed that BNYCF was among those that offered the best terms. Now sh e had to decide whether Amtrak should pay the equipment purchases using BNYCFs leveraged lease proposal, or instead, borrow plate and purchase the equipment on its own.

Company Background In 1970 the marry States Congress created The National Railroad Passenger Corporation (Amtrak) to chink that modern, efficient intercity passenger rail service would remain an constitutional part of the national transportation system.3 The government mandated Amtrak to succuss over the rail passenger operations of private railroads. Since then, Amtrak became the naive provider of passenger rail service in the cogitate States. Amtraks national network provided se! rvice to more than 20 million intercity passengers, and operated 516 stations in 44 states. A trainset consisted of single first class pushchair car, one bistro car, three develop cars, one end coach car and two wedge play cars. 2 Babcock and Brown memorandum, p.1 3 Executive sum-up: 1999 assessment of Amtraks Financial Needs Through 2002 1 This case was...If you exigency to get a full essay, enjoin it on our website: BestEssayCheap.com

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