Container Applications is planning to sell $229 million of notes backed by container leases, according to a presale report published Monday by Standard & Poor’s.

The deal, CAL Funding II series 2013-1, consists of a single tranche with a preliminary ‘A’ rating from S&P. The notes have a legal final maturity of March 2028 but may be redeemed in part or in whole in March 2015.

They are backed by a portfolio containing 126,028 containers and a $10.3 million reserve account. The net book value is $471,482,084. This collateral is shared with CAL Funding II Ltd.'s series 2012-1 issuance

Wells Fargo Securities is the initial purchaser. 

In its presale report, S&P noted that the CAL II notes are backed by one of the youngest fleets of the transactions with comparable collateral. While the portfolio has a relatively low weighted average lease rate, the containers are all on either term or finance leases, which provide some protection from further lease rate reductions during downturns.

The deal is expected to close March 28.

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