KBRA Assigns Preliminary Ratings to STEAM 2021-1

·3 min read

Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to STEAM 2021-1 Class A Notes issued by USQ Rail I LLC and USQ Canada Rail ULC, a railcar leasing securitization.

The securitization is collateralized by a portfolio of 2,941 tank railcars with an aggregate adjusted value of $332.5 million (62.1% by value) and 2,829 non-tank railcars with an aggregate adjusted value of $202.8 million (37.9% by value), (the "Portfolio Railcars"). As of November 30, 2020, approximately 83.6% of leases are on full service leases, 13.7% are on net leases and 2.8% are off-lease. The Issuer will be responsible for covering maintenance costs for the railcars in the portfolio that are under full service lease contracts.

In conjunction with the issuance of the Series 2021-1 Notes, KBRA anticipates withdrawing the ratings on all classes of notes in the Prior Master Series Issuance ("STEAM 2018-1") which are expected to be paid in full at transaction close.

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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 Forms 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 Forms referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.

About KBRA

KBRA is a full-service credit rating agency registered as an NRSRO with the U.S. Securities and Exchange Commission. 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 and is a certified Credit Rating Agency (CRA) with the European Securities and Markets Authority (ESMA). Kroll Bond Rating Agency Europe is registered with ESMA as a CRA.

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Contacts

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John Lampasona, Director (Lead Analyst)
+1 (646) 731-2318
jlampasona@kbra.com

Zara Shirazi, Senior Director
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Michael Lepri, Associate Director
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mlepri@kbra.com

Cecil Smart, Jr. Managing Director (Rating Committee Chair)
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csmart@kbra.com

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