News Column

Fitch Affs GCO Education Loan Funding Trust-I March 2003 Trust Indenture Sr Notes; Upgrades Subs

June 11, 2014

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings affirms the senior notes at 'AAAsf' and upgrades the subordinate notes to 'AAsf' from 'A+sf' issued by GCO Education Loan Funding Trust-I March 2003 Trust Indenture. The Rating Outlook remains Stable for both classes. A complete list of ratings is provided at the end of this release.

KEY RATING DRIVERS

High Collateral Quality: The trust collateral consists of 100% Federal Family Education Loan Program (FFELP) loans. The credit quality of the trust collateral is high, in Fitch's opinion, based on the guarantees provided by the transaction's eligible guarantors and reinsurance provided by the U.S. Department of Education (ED) for at least 97% of principal and accrued interest. Fitch currently rates the U.S. 'AAA' with a Stable Outlook.

Sufficient Credit Enhancement: Credit enhancement (CE) is provided by overcollateralization (OC; the excess of trust's asset balance over bond balance), excess spread, and for the senior notes, subordination provided by the subordinate notes. As of April 2014, senior and subordinate parities are 108.57% and 103.83% respectively. The trust may release cash as long as senior and subordinate parities are 104.00% and 101.50% respectively.

Adequate Liquidity Support: Liquidity support is provided by a debt service reserve fund sized at the greater of 0.75% of the notes outstanding and $1,500,000. The debt service reserve fund is sized at $11,351,865 as of April 2014.

Acceptable Servicing Capabilities: ACS Education Services, Great Lakes Educational Loan Services, Inc., and Nelnet Servicing, Inc. are responsible for the day-to-day servicing of the loans in the trust. In Fitch's opinion, they are acceptable servicers of FFELP student loans.

RATING SENSITIVITIES

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 CE driven by positive excess spread given favorable basis factor conditions could lead to future upgrades.

Fitch has taken the following rating actions:

GCO Education Loan Funding Trust I - March 2003 Trust Indenture:

--2003-2 A-4AR affirmed at 'AAAsf'; Outlook Stable;

--2003-2 A-5AR affirmed at 'AAAsf'; Outlook Stable;

--2005-1 A-3L affirmed at 'AAAsf'; Outlook Stable;

--2005-1 A-6AR affirmed at 'AAAsf'; Outlook Stable;

--2005-2 A-5L affirmed at 'AAAsf'; Outlook Stable;

--2005-2 A-6L affirmed at 'AAAsf'; Outlook Stable;

--2006-1 A-8L affirmed at 'AAAsf'; Outlook Stable;

--2006-1 A-9L affirmed at 'AAAsf'; Outlook Stable;

--2006-1 A-10L affirmed at 'AAAsf'; Outlook Stable;

--2006-1 A-11L affirmed at 'AAAsf'; Outlook Stable;

--2003-2 B-2AR upgraded to 'AAsf' from 'A+sf'; Outlook Stable;

--2005-1 B-3AR upgraded to 'AAsf' from 'A+sf'; Outlook Stable;

--2005-2 B-4AR upgraded to 'AAsf' from 'A+sf'; Outlook Stable.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research:

--'Global Structured Finance Rating Criteria' (May 20, 2014);

--'Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria' (May 17, 2013).

Applicable Criteria and Related Research:

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=748821

Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=708795

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=834181

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.



Fitch Ratings

Primary Analyst

Harry Kohl

Associate Director

+1-212-908-0837

Fitch Ratings, Inc.

33 Whitehall Street

New York, NY 10004

or

Committee Chairperson

Tracy Wan

Senior Director

+1-212-908-9171

or

Media Relations

Sandro Scenga, +1 212-908-0278

sandro.scenga@fitchratings.com

Source: Fitch Ratings


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