RBS sells Angel Trains for $7B

Angel Trains was created in the privatization of British Rail in the 1990s. It provides approximately 4,100 passenger train vehicles and 280 freight locomotives to passenger and freight operators.

RBS, which this week raised $23.4 billion in Europe's largest-ever rights issue, has also put its insurance businesses up for sale.

"The sale forms part of RBS' strategy of focusing resources on its core domestic and international banking businesses," the company said.

Royal Bank of Scotland Group PLC shares rose 3.2 percent to 236.25 pence ($4.62).

Babcock & Brown, which said it arranged long-term financing of more than $5.5 billion, said its consortium included AMP Capital Investors, Deutsche Bank and funds advised by Access Capital Advisers.

"Not only is Angel Trains a very attractive infrastructure asset, but the transaction represents one of the largest acquisitions in Europe in 2008," said Phil Green, chief executive officer of Babcock & Brown.

"Following this transaction Babcock & Brown and its managed funds will be one of the world's leading integrated rail financing groups establishing a strong platform to expand our interests in rail projects around the world," he added.

Angel Trains has operations in 11 other European countries and provides approximately 240 locomotives and 180 passenger trains to various operators, Babcock & Brown said.