KBRA Assigns Preliminary Ratings to InStar 2021-1

NEW YORK–(BUSINESS WIRE)–Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to InStar 2021-1 Class A Notes, Class B Notes and Class C Notes issued by InStar Leasing III, LLC, a railcar leasing securitization.

The securitization is collateralized by a portfolio of 3,138 tank and freight railcars with an aggregate appraised value of $322.23 million. The portfolio includes 1,622 tanks cars with an appraised value of $207.5 million (64% by value) and 1,516 non-tank railcars with an appraised value of $115.2 million (36% by value). As of November 30, 2020, approximately 80.9% of leases are on full service leases, approximately 17.6% are on net leases and approximately 1.5% are on per diem leases. The portfolio is 100% utilized as none of the cars 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. The railcar leasing industry utilizes three different lease types.

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Related Publications

• InStar 2021-1 Pre-Sale Report
• General Global Rating Methodology for Asset-Backed Securities
• Global Structured Finance Counterparty Methodology

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

About KBRA

Kroll Bond Rating Agency, LLC (KBRA) is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority pursuant to the Temporary Registration Regime. 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.

Contacts

Analytical Contacts

John Lampasona, Director (Lead Analyst)

+1 (646) 731-2318

jlampasona@kbra.com

Zara Shirazi, Senior Director

+1 (646) 731-3326

zshirazi@kbra.com

James Chiavaro, Analyst

+1 (646) 731-2383

jchiavaro@kbra.com

Rosemary Kelley, Senior Managing Director (Rating Committee Chair)

+1 (646) 731-2337

rkelley@kbra.com

Business Development Contact

Arielle Smelkinson, Director

+1 (646) 731-2369

asmelkinson@kbra.com