NEW YORK--()--Kroll Bond Rating Agency (KBRA) assigns final ratings to Beacon Container Finance LLC, Series 2012-1. Concurrently we have withdrawn our preliminary rating which was assigned on September 24, 2012.
The transaction represents Beacon Container Finance, LLC’s inaugural securitization as well as the first rating for Kroll Bond Ratings within the ABS container space. The manager, Beacon Intermodal Leasing, LLC, has been in business since January 2008 and is a wholly owned subsidiary of BTMU Capital Corporation, which is owned by The Bank of Tokyo-Mistubishi UFJ. BIL is the 11th largest container leasing company in the world in terms of TEU (“twenty-foot equivalent”) with an owned and managed container fleet of 413,826 TEU as of June 30, 2012 having original equipment cost in excess of $1 billion. BIL’s container fleet is predominantly comprised of dry boxes and refrigerated containers. The transaction’s structural characteristics are similar to previously issued container leasing securitizations, such as a 10-year expected maturity, 15-year legal final maturity, and certain performance tests that if breached could trigger a rapid amortization or result in the replacement of the manager. This rating is based upon the ability of the manager to generate cash flow from the containers over the life of the transaction by re-leasing and eventually selling the containers in the normal course of business, typically near the end of their 15-year useful lives.
KBRA’s rating of container leasing securitizations reflect the assessment of the manager, the quality of the container fleet and leases included in the securitization, and a legal and structural analysis of the transaction. In applying the methodology, KBRA analyzed Beacon’s historical fleet performance data along with industry-wide information. The transaction structure was tested using a cash flow analysis. In the development of the base case assumptions, KBRA generally relied upon the lower of market, company, and competitor historical data to forecast the cash flows over the 15-year transaction life and applied stress assumptions at the highest end of KBRA’s ‘A’ range.
Final Ratings Assigned: Beacon Container Funding LLC, Series 2012-1
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About Kroll Bond Rating Agency
KBRA was established in 2010 by Jules Kroll to restore trust in credit ratings by creating new standards for assessing risk and by offering accurate, clear and transparent ratings. KBRA is registered with the U.S. Securities and Exchange Commission as a Nationally Recognized Statistical Rating Organization (NRSRO). In addition, KBRA is recognized by the National Association of Insurance Commissioners (NAIC) as a Credit Rating Provider (CRP).