DBRS Takes Rating Actions on LEAF Financial Corporation Equipment ABS

DBRS, Inc. (DBRS) has reviewed nine of its outstanding U.S. structured finance equipment asset-backed securities transactions issued by various funds sponsored by LEAF Financial Corporation. The following six transactions were issued by LEAF Financial Corporation. Of the six publicly rated series reviewed, four were confirmed and two were placed Under Review with Negative Implications. Of the six confirmed transactions, 10 classes were confirmed and one class was discontinued due to repayment of the noteholders.

The following public transactions issued by LEAF Financial Corporation have been confirmed:

• LEAF Fund I, LLC - Maximum Facility Amount confirmed at ‘A’ (sf)

• LEAF Fund II, LLC - Maximum Facility Amount confirmed at ‘A’ (sf)

• LEAF Receivables Funding 2, LLC, Equipment Contract Backed Notes, Series 2010-1
– Class A Notes previously rated AAA (sf) now rated Discontinued--Repaid
– Class B Notes confirmed at BBB (sf)
– Class C Notes confirmed at BB (sf)

• LEAF Receivables Funding 6, LLC, Equipment Contract Backed Notes, Series 2011-1
– Class A Notes confirmed at AAA (sf)
– Class B Notes confirmed at AA (sf)
– Class C Notes confirmed at ‘A’ (sf)
– Class D Notes confirmed at BBB (sf)
– Class E-1 Notes confirmed at BB (sf)
– Class E-2 Notes confirmed at B (low) (sf)

The collateral supporting the confirmed ratings is performing within DBRS expectations and available credit enhancement for each class is sufficient to cover DBRS expected losses.

The ratings of LEAF Receivables Funding 4, LLC - Equipment Contract Backed Notes, Series 2010-3 and LEAF Receivables Funding 5, LLC - Equipment Contract Backed Notes, Series 2010-4 have been placed Under Review with Negative Implications. The following classes for each transaction have been put Under Review with Negative Implications:

• LEAF Receivables Funding 4, LLC - Equipment Contract Backed Notes, Series 2010-3
– Class A Notes rated AAA (sf) – Under Review with Negative Implications
– Class B Notes rated AA (sf) – Under Review with Negative Implications
– Class C Notes rated ‘A’ (sf) – Under Review with Negative Implications
– Class D Notes rated BBB (sf) – Under Review with Negative Implications
– Class E Notes rated BB (sf) – Under Review with Negative Implications

• LEAF Receivables Funding 5, LLC - Equipment Contract Backed Notes, Series 2010-4
– Class A Notes rated AAA (sf) – Under Review with Negative Implications
– Class B Notes rated AA (sf) – Under Review with Negative Implications
– Class C Notes rated ‘A’ (sf) – Under Review with Negative Implications
– Class D Notes rated BBB (sf) – Under Review with Negative Implications
– Class E-1 Notes rated BB (sf) – Under Review with Negative Implications
– Class E-2 Notes rated B (low) (sf) – Under Review with Negative Implications

The placement of the ratings Under Review with Negative Implications has been taken as result of the occurrence of an Event of Servicer Termination (Event), as defined in the transaction legal documents, related to performance. The outstanding ratings will either be confirmed or downgraded depending on the resolution of this Event.

The Control Party, which consists of 66 2/3% of the Class A Notes (as long as the Class A Notes are outstanding), has not directed the Trustee to deliver a Servicer Termination Notice (Notice). In the case where Notice is provided, and a servicing transfer were to occur, future collateral performance may be negatively affected and an erosion of credit protection may result.

Currently, the performance of the transactions and credit enhancement levels are for the transactions placed Under Review with Negative Implications are within DBRS expectations for their respective rating levels.

DBRS is monitoring LEAF’s efforts to address this matter and will provide additional disclosure as appropriate.

Notes:
DBRS rating definitions and the terms of use of such ratings are available at www.dbrs.com.

The applicable methodology is the DBRS Master U.S. ABS Surveillance Methodology, which can be found on our website under Methodologies.