News Column

Fitch Affirms Ratings from Vermont Student Assistance Corporation 2012A Indenture

June 13, 2014

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings affirms the ratings of the student loan revenue bonds issued by Vermont Student Assistance Corporation (VSAC) 2012A Indenture, series 2012A and 2013A at 'Asf' and maintains the Stable Rating Outlook.

A detailed list of rating actions follows at the end of this press release.

KEY RATING DRIVERS

Adequate Collateral Quality: The trust is collateralized by approximately $36.7 million of private student loans as of March 2014. The loans were originated under VSAC's Fixed Rate Private Loan Program. Fitch projected remaining defaults to range between 13%-14% as of the current principal balance based on the trust performing in line with initial default projections. A recovery rate of 15% was applied which was determined to be appropriate based on data provided by the issuer.

Sufficient Credit Enhancement (CE): CE is provided by overcollateralization (the excess of the trust's asset balance over bond balance) and excess spread. The total parity ratio is currently 130.96%. The trust is not releasing any excess cash as the recycling period does not end until June 15, 2014, at which time cash can be released at the release parity threshold of 128%.

Adequate Liquidity Support: Liquidity support is provided by a $683,700 debt service reserve fund and a capitalized interest fund.

Satisfactory Servicing Capabilities: Day-to-day servicing is provided by VSAC. Fitch believes the servicing operations are acceptable at this time.

RATING SENSITIVITIES

As Fitch's base case default proxy is derived primarily from historical collateral performance, actual performance may differ from the expected performance, resulting in higher loss levels than the base case. This will result in a decline in CE and remaining loss coverage levels available to the notes and may make certain note ratings susceptible to potential negative rating actions, depending on the extent of the decline in coverage. Fitch will continue to monitor the performance of the trust.

Fitch affirms the following ratings:

Vermont Student Assistance Corporation (VSAC) 2012A Indenture:

VSAC, 2012A Indenture, Series 2012A

--Serial 2017 at 'Asf'; Outlook Stable;

--Serial 2018 at 'Asf'; Outlook Stable;

--Serial 2019 at 'Asf'; Outlook Stable;

--Serial 2019LO at 'Asf'; Outlook Stable;

--Serial 2020LO at 'Asf'; Outlook Stable;

--Serial 2021 at 'Asf'; Outlook Stable;

--Serial 2021LO at 'Asf'; Outlook Stable;

--Serial 2022 at 'Asf'; Outlook Stable;

--Serial 2023 at 'Asf'; Outlook Stable;

--Serial 2024 at 'Asf'; Outlook Stable;

--Serial 2025 at 'Asf'; Outlook Stable;

--Serial 2026 at 'Asf'; Outlook Stable;

--Serial 2029 at 'Asf'; Outlook Stable;

--Serial 2031 at 'Asf'; Outlook Stable;

--Term 2032 at 'Asf'; Outlook Stable.

VSAC, 2012A Indenture, Series 2013A

--Serial 2017 at 'Asf'; Outlook Stable;

--Serial 2018 at 'Asf'; Outlook Stable;

--Serial 2019 at 'Asf'; Outlook Stable;

--Serial 2020 at 'Asf'; Outlook Stable;

--Serial 2021 at 'Asf'; Outlook Stable;

--Serial 2022 at 'Asf'; Outlook Stable;

--Serial 2023 at 'Asf'; Outlook Stable;

--Serial 2024 at 'Asf'; Outlook Stable;

--Serial 2025 at 'Asf'; Outlook Stable;

--Serial 2026 at 'Asf'; Outlook Stable;

--Serial 2027 at 'Asf'; Outlook Stable;

--Serial 2030 at 'Asf'; Outlook Stable.

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

Applicable Criteria and Related Research:

--'U.S. Private Student Loan ABS Criteria', Jan 2014;

--'Global Structured Finance Rating Criteria', May 2014.

Applicable Criteria and Related Research:

Global Structured Finance Rating Criteria

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

U.S. Private Student Loan ABS Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=730956

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=834516

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

Autumn Mascio

Director

+1-212-908-0896

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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