Fitch Ratings maintains the Rating Watch Negative on the 'AAAsf' senior notes and upgrades the subordinate notes to 'Asf' from 'BBBsf' issued by In a release on
Key Rating Drivers
High Collateral Quality:
The trust collateral is comprised of 100 percent of Federal Family Education Loan Program (FFELP) loans with guaranties provided by eligible guarantors and reinsurance provided by the
Rating Watch Negative:
'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:
Credit Enhancement is provided by overcollateralization, excess spread and for the class A notes, subordination provided by the class B notes. The ratings on the class B notes are upgraded due to sufficient level of credit enhancement for a higher rating. As of the
Adequate Liquidity Support:
Liquidity support is provided by a reserve account where the balance is determined as the greater of 0.25 percent of the outstanding notes and
Acceptable Servicing Capabilities:
ACS, as the servicer, is responsible for the day-to-day servicing of this trust. In Fitch's opinion, ACS is an acceptable servicer of FFELP student loans.
Since the FFELP student loan ABS relies 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-3 note at 'AAAsf'; Rating Watch Negative maintained;
--Class A-4 note at 'AAAsf'; Rating Watch Negative maintained;
--Class B upgraded to 'Asf' from 'BBBsf'; Outlook Stable.
Additional information is available at 'fitchratings.com'.
--'Global Structured Finance Rating Criteria' (
--'Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria' (
Global Structured Finance Rating Criteria
Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria -- Amended
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Fitch Ratings maintains the Rating Watch Negative on the 'AAAsf' senior notes and upgrades the subordinate notes to 'Asf' from 'BBBsf' issued by
In a release on