Fitch Affirms Unison Ground Lease Funding Series 2010-1 and 2010-2

CHICAGO--()--Fitch Ratings has affirmed the ratings for Unison Ground Lease Funding, LLC Secured Cellular Site Revenue Notes series 2010-1 and 2010-2 as follows:

--$67,000,000 series 2010-1, class C at 'Asf'; Outlook Stable;

--$87,500,000 series 2010-2, class C at 'Asf'; Outlook Stable;

--$41,500,000 series 2010-2, class F at 'BBsf'; Outlook Stable.

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.

RATING SENSITIVITIES

Ratings on 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.

The certificates represent beneficial ownership interest in the trust, primary assets of which are 1,515 wireless communication sites securing one fixed-rate loan. As of the March 2015 distribution date, the aggregate principal balance of the notes remains unchanged at $196 million since issuance. The notes are interest only for the entire seven-year period for series 2010-1, Class C and 10 years for classes C and F of series 2010-2.

The ownership interest in the cellular sites consists primarily of perpetual and limited long-term easements of land, rooftops, or other structures on which site space is allocated to wireless service providers (WSP) and independent tower operators. 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.

As part of its review, Fitch analyzed the collateral data and site information provided by the master servicer, Midland Loan Services. As of March 31, 2015, aggregate TTM run rate net cash flow increased 17.3% since issuance to $27.9 million. The Fitch stressed DSCR increased from 1.27x at issuance to 1.47x as a result of the increase in net cash flow.

The portfolio of sites are composed of ground easements, rooftops and structures which represent 54.9%, 36.2% and 8.9% of revenue respectively. Site concentrations are in-line with percentages of revenue at issuance.

The ownership interests in the sites consist of 68.8% of revenue in perpetual easements and 28.8% in limited term easements. The limited term easements are generally long term with an average remaining term in excess of 40 years.

Additional information on Fitch's criteria for analyzing U.S. Wireless Tower Transactions is available in the March 27, 2015 report, 'Criteria for Analyzing U.S. Wireless Tower Transactions,' which is available at 'www.fitchratings.com' under the following headers:

Structured Finance >> CMBS >> Criteria Reports

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

Applicable Criteria and Related Research:

--'Global Structured Finance Rating Criteria' (Mar. 31, 2015);

--'Criteria for Analyzing U.S. Wireless Tower Transactions' (Mar. 27, 2015);

--'Criteria for Analyzing Large Loans in U.S. Commercial Mortgage Transactions' (Mar. 20, 2015).

Applicable Criteria and Related Research:

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=864268

Criteria for Analyzing U.S. Wireless Tower Transactions

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

Criteria for Analyzing Large Loans in U.S. Commercial Mortgage Transactions

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=862818

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=983019

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Contacts

Fitch Ratings
Primary Analyst
David Ro, +1-312-368-3132
Director
Fitch Ratings, Inc.
70 West Madison
Chicago, IL 60602
or
Committee Chairperson
Britt Johnson, +1-312-606-2341
Senior Director
or
Media Relations
Sandro Scenga, New York, +1-212-908-0278
sandro.scenga@fitchratings.com

Contacts

Fitch Ratings
Primary Analyst
David Ro, +1-312-368-3132
Director
Fitch Ratings, Inc.
70 West Madison
Chicago, IL 60602
or
Committee Chairperson
Britt Johnson, +1-312-606-2341
Senior Director
or
Media Relations
Sandro Scenga, New York, +1-212-908-0278
sandro.scenga@fitchratings.com