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 have 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 rider trains and service in the Northeast corridor from the existing service.2 Acela, scheduled to start service in late 1999, promised to offer faster supply times and premium service (see Exhibit 1). Arlene and her staff had gone(p) over the proposals and agreed that BNYCF was among those that offered the best terms. Now she had to decide whether Amtrak should finance the equipment purchases using BNYCFs leveraged lease proposal, or instead, borrow funds and purchase the equipment on its own.

Company Background In 1970 the articulation States Congress created The National Railroad Passenger Corporation (Amtrak) to curb that modern, efficient intercity passenger rail service would remain an implicit in(p) part of the national transportation system.3 The government mandated Amtrak to set about over the rail passenger operations of private railroads. Since then, Amtrak became the simple-minded provider of passenger rail service in th e cogitate States. Amtraks national networ! k provided service to more than 20 million intercity passengers, and operated 516 stations in 44 states. A trainset consisted of virtue first class pushchair car, one bistro car, three prepare cars, one end coach car and two force out play cars. 2 Babcock and Brown memorandum, p.1 3 Executive compact: 1999 assessment of Amtraks Financial Needs Through 2002 1 This case was...If you exigency to get a full essay, swan it on our website: BestEssayCheap.com

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