Fitch Affirms Grain Spectrum Funding II, LLC, Series 2014-1 Notes

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings has affirmed the following class of notes issued by Grain Spectrum Funding II, LLC:

--$194,325,000 series 2014-1 wireless spectrum-backed notes at 'A-sf'.

The Rating Outlook is Stable.

KEY RATING DRIVERS

The rating primarily relies on the Issuer Default Ratings (IDR) of Cellco Partnership (Verizon). As a result, there is one risk-presenting entity in this transaction for purposes of applying the Fitch CLN criteria 'Global Rating Criteria for Single- and Multi-Name Credit-Linked Notes'. Verizon has an IDR of 'A-' with a Stable Outlook. The transaction relies to a lesser extent on U.S. Bank N.A. as trustee (rated 'AA'/Outlook Stable/'F1+').

RATING SENSITIVITIES

Changes in the IDR of Verizon will result in a change in the rating of the series 2014-1 note according to Fitch's CLN Criteria.

Proceeds from Grain's series 2014-1 note issuance were used by the issuer to finance the purchase of wireless spectrum licenses from the issuer's subsidiary and to pay expenses, with the remaining proceeds returned to the issuer as a dividend. Through a lease transfer and license purchase agreement (the agreement), the issuer is leasing AWS and PCS spectrum to Verizon. Payments received under the agreement support payments made on the series 2014-1 notes. Based on its commitment under a 10-year extendable 'hell-or-high-water' lease transfer agreement with the issuer, Verizon Wireless, as the lessee, is obligated to make and guarantee lease payments.

Initial Key Rating Drivers and Rating Sensitivity are further described in the Presale Report published on Sept. 2, 2014. A comparison of the transaction's Representations, Warranties, and Enforcement Mechanisms (RW&Es) is also available on Fitch's website.

Additional information is available at www.fitchratings.com.

Applicable Criteria

Counterparty Criteria for Structured Finance and Covered Bonds (pub. 14 May 2014)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=744158

Global Rating Criteria for Single- and Multi-Name Credit-Linked Notes (pub. 09 Mar 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=863276

Global Structured Finance Rating Criteria (pub. 06 Jul 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=867952

Related Research

Grain Spectrum Funding II, LLC, Series 2014-1 -- Appendix

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=768508

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=998553

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=998553

Endorsement Policy

https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

View source version on businesswire.com: http://www.businesswire.com/news/home/20160128006361/en/

Fitch Ratings
Primary Surveillance Analyst
Shashi Srikantan, +1-212-908-0393
Director
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Committee Chairperson
Kevin Corrigan, +1-212-908-0156
Senior Director
or
Media Relations
Sandro Scenga, New York, +1-212-908-0278
[email protected]

Source: Fitch Ratings

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