Proceeds from the series 2014-1 note issuance are being used by
Grain III has entered into a 10-year extendable lease transfer agreement with
Based on its commitment under a 10-year extendable 'hell or high water' lease transfer agreement with
The transaction rating relies on the Issuer Default Ratings (IDR) of
KEY RATING DRIVERS
The rating is assigned as a 'first to default' rating, in accordance with Fitch's 'Global Rating Criteria for Single- and Multi-Name Credit-Linked Notes' and 'Counterparty Criteria for Structured Finance and Covered Bonds.' The strength of the lease agreement, which is a hell-or-high-water agreement, relies on the performance of Verizon as outlined in the transaction summary above. Fitch has received enforceability opinions on the agreements, and believes the lessee will perform under its agreement so long as the lessee has not defaulted on its other outstanding indebtedness. As a result of this exposure to default risk on the lessee's financial obligations, Fitch is comfortable using Verizon's IDRs as an indicator of its performance under the agreements.
The transaction rating primarily relies on the IDR of Verizon. As a result, there is one risk presenting entity in this transaction for purposes of applying the Fitch CLN Matrix. Cellco d/b/a
The Outlook for the notes is based upon the Stable Outlook on
The rating of the series 2014-1 notes is sensitive to the IDR of the lessee. Any change in the rating of Verizon and any resulting permutation of this rating would likely result in a change in the ratings of the series 2014-1 note, according to the Fitch Risk CLN Matrix. For example, if Verizon were downgraded to 'BBB+', ceteris paribus, the ratings of the series 2014-1 notes would likely be downgraded to 'BBB+sf'.
Key rating drivers and rating sensitivities are further described in the pre-sale report titled 'Grain Spectrum Funding II, LLC, Series 2014-1', dated
An assessment of the transaction's representations and warranties was also completed and found to be consistent with the ratings assigned to the notes. For further information, see 'Grain Spectrum Funding II, LLC, Series 2014-1 Representation & Warranties Appendix', dated
Additional information is available at 'www.fitchratings.com'.
Source: Fitch Ratings
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