KEY RATING DRIVERS
High Collateral Quality: The trust collateral consists of 100% Federal Family Education Loan Program (FFELP) student loans. The credit quality of the trust is high, in Fitch's opinion, based on the guarantees provided by the transaction's eligible guarantors and reinsurance provided by the
Rating Watch Maintained: All existing and new issuances of 'AAAsf' rated tranches of FFELP securitizations are on Rating Watch Negative following the revision of the long-term foreign and local currency Issuer Default Ratings (IDRs) of the U.S.
Sufficient Credit Enhancement: Credit enhancement is provided by overcollateralization and excess spread. Parity for the class A notes is at 110.75% as of
Adequate Liquidity Support: Liquidity support for the notes is provided by a reserve account with a required amount of the greater of 0.25% and
Acceptable Servicing Capabilities:
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:
--Class A-1 at 'AAAsf'; Rating Watch Negative maintained;
--Class A-2 at 'AAAsf'; Rating Watch Negative maintained.
Additional information is available at 'www.fitchratings.com'.
--'Global Structured Finance Rating Criteria' dated
--'Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria' dated
Global Structured Finance Rating Criteria
Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria -- Amended
Source: Fitch Ratings
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