Flagship Rail Services plans to issue an inaugural securitization of railcar leases that has been assigned preliminary ratings by Standard & Poor’s.
The $335.3 million FRS I LLC (Series 2013-1)is backed by a portfolio containing 5,541 railcars and a pre-funding account containing $22,620,194, according to the S&P presale report. The capital structure includes two tranches of ‘A’ rated notes, offered in on $105 million tranche and a $191.96 million tranche. It also included $38.56 million of ‘BBB’ rated notes.
The portfolio includes about 21.3% full-service leases and 78.7% net leases calculated by the number of railcars.
The initial fleet composition includes 758 tank cars and 4,783 non-tank freight cars. A majority of the railcars have been manufactured since 2006. S&P noted in the presale report that railcar's useful life is typically 35-40 years, which is longer than the transaction's 30-year life.