Fitch Affirms Unison Ground Lease Funding Series 2013-1 and 2013-2

CHICAGO--(BUSINESS WIRE)-- Fitch Ratings has affirmed Unison Ground Lease Funding, LLC secured cellular site revenue notes, series 2013-1 and 2013-2 as follows:

--$98,000,000 class 2013-1 A at 'Asf'; Outlook Stable;

--$31,000,000 class 2013-1 B at 'BB-sf'; Outlook Stable;

--$13,600,000 class 2013-2 A at 'Asf'; Outlook Stable;

--$4,400,000 class 2013-2 B at 'BB-sf'; Outlook Stable.

The certificates represent beneficial ownership interest in the trust, primary assets of which are 1,056 cellular sites securing one fixed-rate loan. As of the October 2015 distribution date, the aggregate principal balance of the notes remains unchanged at $147 million since issuance. The notes are interest only for the entire seven-year period.

The ownership interest in the cellular sites consists of perpetual easements, long-term easements, prepaid leases, and fee interests in land, rooftops, or other structures on which site space is allocated for placement of tower and wireless communication equipment. Thus, unlike typical cell tower securitizations in which the towers serve as collateral, the collateral for this securitization generally consists of easements and the revenue stream from the payments the owner of the tower and/or tenants of the site pay to Unison.

KEY RATING DRIVERS

The affirmations are due to stable performance and continued cash flow growth since issuance. The Stable Outlooks reflect the limited prospect for upgrades given the provision to issue additional notes.

As part of its review, Fitch analyzed the collateral data and site information provided by the issuer, MelTel Land Funding LLC. As of Oct. 15, 2015, aggregate revenue increased 11.8% since issuance to $20.3 million. The Fitch stressed debt service coverage ratio (DSCR) increased from 1.24x at issuance to 1.40x as a result of the increase in net cash flow.

The ownership interests in the sites consist of 48.1% of revenue in perpetual easements and 47.6% in limited term easements. The limited term easements are generally long term with an average remaining term in excess of 40 years.

RATING SENSITIVITIES

The classes are expected to remain stable based on continued cash flow growth due to annual rent escalations and automatic renewal clauses resulting in higher debt service coverage ratios since issuance. The ratings have been capped at 'A' due to the specialized nature of the collateral and the potential for changes in technology to affect long-term demand for wireless tower space.

DUE DILIGENCE USAGE

No third party due diligence was provided or reviewed in relation to this rating action.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria

Criteria for Analyzing U.S. Wireless Tower Transactions (pub. 27 Mar 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=863223

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

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

Related Research

Unison Ground Lease FundingNotes, Series 2013-1 -- Appendix

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=706816

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=993601

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=993601

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/20151106005895/en/

Fitch Ratings
Primary Analyst
David Ro
Director
+1-312-368-3132
Fitch Ratings, Inc.
70 West Madison Street
Chicago, IL 60602
or
Committee Chairperson
Mary MacNeill
Managing Director
+1-212-908-0785
or
Media Relations:
Sandro Scenga, +1 212-908-0278
[email protected]

Source: Fitch Ratings

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