NEW YORK–(BUSINESS WIRE)–Kroll Bond Rating Agency (KBRA) assigns a preliminary rating to the Series 2020-1 Class A Notes issued by Trinity Rail Leasing 2018 LLC (the “Issuer”), a railcar leasing securitization. The Issuer is a special purpose entity and wholly owned subsidiary of Trinity Industries Leasing Company (“Trinity”), and has been structured to issue multiple series of notes. The Issuer currently has one series of notes outstanding, Series 2018-1.

The securitization is collateralized by a portfolio of 3,822 non-tank railcars with an aggregate adjusted value of $273.2 million (47.4% by value), and 3,088 tank railcars with an aggregate adjusted value of $302.7 million (52.6% by value) (the “Portfolio Railcars”). As of August 31, 2020, approximately 71.5% of leases are on full service leases, 18.1% are on net leases, 8.8% are on per diem leases and 1.7% are currently 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 2020-1 Notes, KBRA anticipates affirming the ratings on the Issuer’s outstanding Series 2018-1, Class A-2 Notes and withdrawing the ratings on the Issuer’s Series 2018‑1, Class A-1 Notes which will be paid in full at transaction close. The affirmation will reflect both the collateral performance, which is expected to be in line with the respective KBRA rating scenarios, and the expectation that the Series 2018-1, Class A-2 will continue to pass their respective rating level stresses with the addition of the Series 2020-1, Class A Notes. The withdrawal is expected to reflect the payment in full of Series 2018-1, Class A-1 Notes at transaction close.

The notes in this transaction consist of two senior note classes, the Series 2020-1, Class A (the “Series 2020-1, Class A Notes” or the “Offered Notes”) and Series 2018, Class A-2 Notes (the “Class A-2 Notes” and together, the “Notes”). The Series 2020-1, Class A Notes will amortize in to approximately a 12% balloon by the rapid amortization date (RAD), while the Class A-2 Notes will not amortize until the RAD, on or the payment date in June 2028.

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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 U.S. Information Disclosure Form 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 U.S. Information Disclosure Form 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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