Kroll Bond Rating Agency assigned 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 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). As of Aug. 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 expects to affirm the ratings on the issuer’s outstanding Series 2018-1, Class A-2 notes and withdraw 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 notes 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 and Series 2018, Class A-2 notes. The Series 2020-1, Class A notes will amortize into 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.