KBRA Assigns Preliminary Ratings to STEAM 2021-3

NEW YORK--(BUSINESS WIRE)--Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to USQ Rail II LLC (“U.S. Issuer”) and USQ Canada Rail II ULC (“Canadian Issuer”, and together with the U.S. Issuer, the “Issuers”), Series 2021-3 (“STEAM 2021-3”), a railcar leasing securitization. The Issuers are newly formed special purpose entities and wholly owned subsidiaries (directly or indirectly) of ITE Rail Fund Levered L.P. (“ITE Rail Levered”) and have been structured to issue multiple series of notes, including STEAM 2021-3. All of the railcars in the portfolio (the “Portfolio Railcars”) and the related leases will consist of railcars acquired by the U.S. Issuer from ITE Rail Levered (“U.S. Seller”).

The securitization is collateralized by a portfolio of 1,961 tank railcars with an aggregate FMV of $233.7 million (72.1% by value) and 1,062 non-tank railcars with an aggregate adjusted value of $90.2 million (27.9% by value), (the “Portfolio Railcars”). As of March 31, 2021, approximately 99.5% (by unit) of the railcars are on full service leases. Under such leases, the lessor is responsible for maintaining and servicing the railcars, administering and paying applicable taxes and providing ancillary services to the lessee.

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Disclosures

Further information on key credit considerations, sensitivity analyses that consider what factors can affect these credit ratings and how they could lead to an upgrade or a downgrade, and ESG factors (where they are a key driver behind the change to the credit rating or rating outlook) can be found in the full rating report referenced above.

A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.

Information on the meaning of each rating category can be located here.

Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA) is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority pursuant to the Temporary Registration Regime. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider.