QUICK WORK FOR GRANDE VITESSE
To attract public and private financing for its latest high-speed train, Societe Nationale des Chemins de Fer Francais (SNCF), the French national railway, worked out an innovatory scheme.
It is establishing an independent entity to finance the proposed $1 billion Atlantique network, which will serve the country's west coast. This financing instrument will enable the railway to tap the coffers of the major cities along the route of the TGV (train de grande vitesse) and keeps these loans off SNCF's overburdened balance sheet.
"We refuse an easy solution that would consist of increasing our indebtedness," insisted Philippe Essig, SNCF's president. Along with other big French public borrowers, the railway is heavily burdened from past borrowings and fears the political consequences if it appears to go deeper in debt.
French bankers who know SNCF and its inventive general manager of financial operations, Marc Wiszniak, were hardly startled at this innovation. It's merely the latest in a series of original SNCF financings, which have made the railway not only one of the biggest French borrowers but a pacesetter on the international money markets.
This year SNCF expects to borrow $2 billion dollars abroad, down from a peak of $4 to 5 billion annually earlier in the decade.