High Collateral Quality:
The collateral consists of 100% of 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
Sufficient Credit Enhancement:
While both the senior and subordinate notes will benefit from overcollateralization (OC; the excess of trust's asset balance over bond balance) and excess spread, the senior notes also benefit from subordination provided by the class B note. As of
Adequate Liquidity Support:
Liquidity support for the notes is provided by a reserve account which is currently at
Acceptable Servicing Capabilities:
PHEAA, as servicer and
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-2 notes affirmed at 'AAAsf'; Outlook Stable;
--Class A-3 notes affirmed at 'AAAsf'; Outlook Stable;
--Class A-4 notes affirmed at 'AAAsf'; Outlook Stable;
--Class A-5 notes affirmed at 'AAAsf'; Outlook Stable;
--Class A-6 notes affirmed at 'AAAsf'; Outlook Stable;
--Class B-1 notes affirmed at 'Asf'; Outlook Stable.
Additional information is available at 'www.fitchratings.com'
A comparison of the transaction's RW&E to those of typical RW&E for student loans is available by accessing the reports below.
--'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
Source: Fitch Ratings
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