Fitch Ratings downgraded Wirefree Partners III, LLC PCS Spectrum Lease-Backed Notes, 2005-1 to BBB', from BBB+', after taking a similar action on the unsecured corporate rating of Sprint Nextel and its subsidiaries.

Sprint Nextel leases personal communications services (PCS) spectrum licenses to Sprint.Com and WirelessCo, L.P., two of its wholly owned subsidiaries. Sprint formed the Wirefree Partners in 2004 as a wireless broadband service provider to manage its acquired spectrum leases. Leases revenue from those PCS spectrum licenses back the Wirefree Partners bonds.

The current principal amount on the Wirefree Partners deal is $128.4 million, representing a single class. Annual payments of interest and principal were made in November 2006 after the first annual lease payments were received from the lessee, Fitch said. Although the transaction's performance is currently meeting expectations, Fitch said it downgraded the ABS bonds because the deal's rating is capped at, and highly dependent on, Sprint Nextel's corporate bond ratings.

(c) 2007 Asset Securitization Report and SourceMedia, Inc. All Rights Reserved.

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