KEY RATING DRIVERS
High Collateral Quality: The trust collateral consists entirely of Federal Family Education Loan Program (FFELP) loans. Although the trust is expected to consist of approximately 21.1% of rehabilitated FFELP loans as of the end of the acquisition period, guaranties provided by eligible guarantors and reinsurance provided by the
Rating Watch Negative: All existing and new issuances of 'AAA' 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: Cash flow scenarios for class A and B notes were satisfactory under Fitch's corresponding stresses. At closing, total parity is expected to be 101.06% and senior parity is expected to be 103.07%. Total credit enhancement (CE) is provided by overcollateralization (OC; about
Adequate Liquidity Support: Liquidity support for PHEAA SLT 2014-1 notes is provided by a
Satisfactory 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.
Key Rating Drivers and Rating Sensitivities are further described in the pre-sale report titled 'PHEAA Student Loan Trust 2014-1', dated
Additional information is available at 'www.fitchratings.com'.
--'Global Structured Finance Rating Criteria' (
--'Rating U.S. ABS Criteria' (
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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