Union Pacific Equipment Trusts
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This page was last updated on January 31, 2014.
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Union Pacific Equipment Association
Prior to the use of equipment trusts, Union Pacific owned and controlled the Union Pacific Equipment Association, incorporated on October 5, 1905 in Utah, and amended in 1907. The equipment association held the title of equipment used by Union Pacific and its auxiliary and subsidiary railroads, and other railroads, and leased the equipment to them for operation.
An equipment trust is a form of secured financial debt similar to a mortgage, usually to take advantage of tax benefits. In a typical equipment trust, a "trust certificate" is sold to investors in order to finance the purchase of railroad equipment such as locomotives and rolling stock by a trust managed on the investors' behalf. The trust then leased the equipment to the railroad, and the trustee (usually a bank) then routed payments through the trust to the investors. Trust payments were usually paid on an annual basis, and usually in large enough amounts that the trust was paid off long before the equipment was worn out. Upon maturity of the trust, the railroad received title to the equipment. The equipment trust was not a lease because the railroad received title to the equipment at the end. An equipment trust was usually put in place to protect against a bankruptcy, because the equipment was not owned by the railroad, and was not considered railroad property for the purposes of bankruptcy.
Union Pacific used equipment trusts as early as 1920, and as late as 1981.
|Trust Name||Equipment||Per Unit||Total|
|Union Pacific Equipment Trust No. 4 of 1974||
|Union Pacific Equipment Trust No. 5 of 1974||
|Union Pacific Equipment Trust No. 6 of 1974||
|Union Pacific Equipment Trust No. 1 of 1977||UP 3335 to UP 3348 (14 units)||$577,100||$8,079,400|
|Union Pacific Equipment Trust No. 1 of 1978||UP 9000 to UP 9005 (6 units)||$502,400||$3,014,400|
|Union Pacific Equipment Trust No. 1 of 1978||UP 3410 to UP 3438 (29 units)||$609,425||$17,673,325|
|Union Pacific Equipment Trust No. 2 of 1978||UP 3439 to UP 3488 (50 units)||$609,425||$30,471,250|