Iowa Interstate Railroad

PROJECT DESCRIPTION

Solve $13.5MM rail finance challenge

BACKGROUND

Rail finance can be challenging. Iowa Interstate, professionally run with a Wharton MBA as CFO, and Arthur Andersen-audited financial statements sought SRF’s expertise to solve a difficult rail finance challenge.

Few lenders are available for the variety of funding situations which railroad companies face. Iowa Interstate sought to save a multi-million dollar tax credit prior to its expiration.

SRF APPROACH

Strategic Rail Finance quickly grasped all aspects of the company’s financial structure and accounting. SRF appreciated the railroad’s unique strengths and relevance to mid-west transportation. SRF’s analysis led to a remodeling of the company’s financial statements which transformed lenders’ financial ratio analysis. Strategic Rail Finance created a financial presentation and successfully identified the right lender for a rarely-used approach in contemporary railroad finance.

RESULTS

• Identified successful strategy to save tax credits prior to expiration
• Eliminated $3.3 million of balance sheet liabilities
• Identified and highlighted operational assets not included in company’s own presentation
• Quickly evaluated options in spectrum of financial institutions
• Sourced $13.5 million sale-leaseback transaction