Fitch Ratings maintains the Rating Watch Negative on the senior notes currently rated 'AAAsf' and affirms the subordinate notes at 'AA+sf' issued by Educational Funding of the The Rating Outlook remains Stable for the subordinate notes.
KEY RATING DRIVERS
High Collateral Quality: The trust collateral comprises Federal Family Education Loan Program (FFELP) loans with guaranties provided by eligible guarantors and reinsurance provided by the
Rating Watch Maintained: 'AAAsf' rated tranches of U.S. FFELP student loan ABS are maintained on Rating Watch Negative following the revision of the U.S. sovereign rating on
Sufficient Credit Enhancement: CE is provided by overcollateralization (OC; the excess of trust's asset balance over bond balance) and excess spread. As of
Adequate Liquidity Support: Liquidity support is provided by a
Acceptable Servicing Capabilities: Day-to-day servicing is provided by PHEAA, which Fitch deems to be an acceptable FFELP student loan servicer.
Since FFELP student loan ABS rely on the U.S. government to reimburse defaults, 'AAAsf' FFELP ABS ratings will likely move in tandem with the 'AAA' U.S. sovereign rating. Aside from the U.S. sovereign rating, defaults and basis risk account for the majority of the risk embedded in FFELP student loan transactions. Additional defaults and basis shock beyond Fitch's published stresses could result in future downgrades. Likewise, a buildup of credit enhancement driven by positive excess spread given favorable basis factor conditions could lead to future upgrades.
Fitch has taken the following rating actions:
Educational Funding of the
--Class A-1 at 'AAAsf'; Negative Rating Watch maintained.
--Class A-2 at 'AAAsf'; Negative Rating Watch maintained.
--Class B affirmed at 'AA+sf'; Outlook Stable.
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Fitch Ratings maintains the Rating Watch Negative on the senior notes currently rated 'AAAsf' and affirms the subordinate notes at 'AA+sf' issued by Educational Funding of the
The Rating Outlook remains Stable for the subordinate notes.