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.
- General Global Rating Methodology for Asset-Backed Securities
- Global Structured Finance Counterparty Methodology
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.
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Information on the meaning of each rating category can be located here.
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