OREANDA-NEWS. September 29, 2015.  Fitch Ratings affirms the rating on Grain Spectrum Funding II, LLC, series 2014-1 notes (the series 2014-1 notes) as follows:

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

TRANSACTION SUMMARY

Proceeds from the series 2014-1 note issuance were used by Grain Spectrum Funding II, LLC (Grain II), the issuer, to finance the purchase of wireless spectrum licenses by the issuer's subsidiary Grain Spectrum III, LLC (Grain III) and to pay expenses, with the remaining proceeds returned to the ultimate equity owners of the issuer as a dividend.

At closing, Grain III entered into a 10-year extendable lease transfer agreement with Cellco Partnership, d/b/a Verizon Wireless (Verizon Wireless). Payments made by Verizon Wireless, the lessee, under the lease transfer 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 Grain III, Verizon Wireless, as the lessee, is obligated to make and guarantee lease payments.

The transaction rating relies on the Issuer Default Rating (IDR) of Cellco Partnership d/b/a Verizon Wireless, which is rated 'A-' with a Stable Outlook by Fitch.

KEY RATING DRIVERS
The rating is 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, a 'hell-or-high-water agreement', relies on the performance of Verizon Wireless as outlined in the transaction summary above. Fitch received enforceability opinions at closing, 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 Wireless' IDR as an indicator of its performance under the agreements.

The transaction rating primarily relies on the IDR of Verizon Wireless. As a result, there is one risk-presenting entity in this transaction for purposes of applying the Fitch CLN Matrix. Verizon Wireless is rated 'A-', Outlook Stable by Fitch and is the IDR that is considered the link to the rating on the notes. The transaction relies to a lesser extent on U.S. Bank N.A. as trustee (rated 'AA-', Outlook Stable).

The Outlook for the notes is based on the Stable Outlook on Verizon Wireless.

RATING SENSITIVITIES
The rating of the series 2014-1 notes is sensitive to the IDR of the lessee. Any change in the rating of Verizon Wireless would likely result in a change in the ratings of the series 2014-1 notes. For example, if Verizon Wireless were downgraded to 'BBB+', 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 presale report titled 'Grain Spectrum Funding II, LLC, Series 2014-1', dated Sept. 2, 2014, available on www.fitchratings.com, or by clicking on the link.

An assessment of the transaction's representations and warranties was also completed at closing and found to be consistent with the ratings assigned to the series 2014-1 notes. For further information, see 'Grain Spectrum Funding II, LLC, Series 2014-1 Representation & Warranties Appendix', dated Sept. 2, 2014.

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