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Rating Action:

Moody's downgrades Frontier equipment deals

29 Mar 2010

New York, March 29, 2010 -- Moody's Investors Service downgraded six classes of notes in three securitizations issued by Frontier Leasing Corporation. The securitized pools consist of equipment loans, primarily backed by coin laundry and car wash equipment. Frontier Leasing Corporation is the servicer for the Frontier Equipment Receivables Trust 2002-1 and Frontier Equipment Receivables Trust 2004-1 deals. LeaseDimensions, Inc is the successor servicer for Frontier Funding Company V, LLC. LeaseDimensions, Inc began servicing this deal in May 2009.

The rating actions related to Frontier Equipment Receivables Trust 2002-1 were prompted by the concern that the balloon payments will not be received before the final legal maturity date of May 20, 2010. As of the February 2010 payment date, there were six contracts remaining in the pool. Four of these contracts have balloon payments due in the beginning of April and May. Two contracts with balloon payments, comprising approximately 34% of the current pool balance, were 1-30 days past due. Subordination of the Class B notes is the only available form of credit enhancement.

The rating actions related to the Frontier Equipment Receivables Trust 2004-1 deal were prompted by the fact that the notes are currently undercollateralized. As of the February 2010 payment date, only 22 contracts remained in the pool, which contributes to the obligor concentration risk. Five contracts, comprising approximately 16% of the current pool balance, were 30 days or more past due. Because there is no cash left in the reserve account, and both Class B and C notes have been written down, the Class A will absorb any future collateral losses.

The rating actions related to Frontier Funding Company V were prompted by higher than expected delinquencies and defaults. As of the February 2010 payment date, approximately 14% of the pool has defaulted and approximately 12% of the pool balance was 60 days or more past due. Subordination to the Class A is the only available form of credit enhancement. The Class A note is wrapped by CIFG Assurance N.A.

The principal methodology used in rating the transaction was "Moody's Approach to Rating Securities Backed by Equipment Leases and Loans," which can be found at www.moodys.com on the "Ratings Methodologies & Performance" page. Other methodologies and factors that may have been considered in the process of rating this issue can also be found on this page. In addition, Moody's publishes a complimentary weekly summary of structured finance credit, ratings and methodologies, available at www.moodys.com/SFQuickCheck.

The complete rating actions are as follows:

Issuer: Frontier Equipment Receivables Trust 2002-1

Pool Current Expected Cumulative Net Losses: 4.6% (as a percent of original balance)

Class A, Downgraded to Caa2; previously on May 4, 2009 Downgraded to Ba3 from Baa2

Class B, Downgraded to C; previously on Dec 11, 2008 Downgraded to Caa2 from Ba3

Issuer: Frontier Equipment Receivables Trust 2004-1

Pool Current Expected Cumulative Net Losses: 7.1% (as a percent of original balance)

Cl. A, Downgraded to Caa2; previously on May 4, 2009 Downgraded to B2 from Ba1

Cl. B, Downgraded to C; previously on Dec 11, 2008 Downgraded to Ca from Caa2

Issuer: Frontier Funding Company V, LLC

Pool Current Expected Cumulative Net Losses: 15.3% (as a percent of original balance)

Cl. A, Underlying Rating: Downgraded to B2; previously on Dec 11, 2008 Downgraded to Ba1 from Baa2

Cl. B, Downgraded to C; previously on Dec 11, 2008 Downgraded to Ca from B3

New York
Irina Faynzilberg
VP - Senior Credit Officer
Structured Finance Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

New York
Katherine Lew
Senior Associate
Structured Finance Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Moody's downgrades Frontier equipment deals
No Related Data.
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