Kroll Bond Rating Agency assigned preliminary ratings to USQ Rail II (U.S. issuer) and USQ Canada Rail II (Canadian issuer) 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 and have been structured to issue multiple series of notes, including STEAM 2021-3. All of the railcars in the portfolio 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). As of March 31, 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.