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Fitch Expects to Rate Rhode Island Student Loan Authority 2014-1; Issues Presale

June 2, 2014

NEW YORK--(BUSINESS WIRE)-- Link to Fitch Ratings' Report: Rhode Island Student Loan Authority, Series 2014-1 (US Student Loans)

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=749648

Fitch Ratings expects to rate Rhode Island Student Loan Authority, series 2014-1 as follows:

--$93,100,000 series 2014-1 notes 'AAAsf(EXP)'; Outlook Stable;

KEY RATING DRIVERS

High Collateral Quality: The trust collateral for the notes is comprised of 100% of Federal Family Education Loan Program (FFELP) loans. The credit quality of the trust collateral is high and based on the guarantees provided by the transaction's eligible guarantors and at least 97% reinsurance of principal and accrued interest provided by the U.S. Department of Education (ED).

Sufficient Credit Enhancement: The cash flow results for the notes were satisfactory under Fitch 'AAAsf' stresses. At closing, total parity is expected to be approximately 110.03%. Total credit enhancement (CE) is provided by overcollateralization of $9,336,141. Excess cash cannot be release from the trust until all notes are fully redeemed.

Adequate Liquidity Support: Liquidity support for the RISLA Series 2014-1 notes is provided by a $250,000 reserve account (0.25% of initial student loan balance) and funded at closing. The required reserve account balance for any distribution dates is 0.25% of the outstanding student loan balance or $250,000.

Acceptable Servicing Capabilities: Day-to-day servicing is provided by Nelnet Servicing, LLC (Nelnet) for 100% of the loans. Fitch has reviewed the servicing operations of Nelnet and believes it to be an acceptable servicer of FFELP student loans.

RATING SENSITIVITIES

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

Key Rating Drivers and Rating Sensitivities are further detailed in the presale report, released today and available at 'www.fitchratings.com' or by clicking on the link.

A comparison of the transaction's Representations, Warranties & Enforcement Mechanisms (RW&Es) to those of typical RW&Es for that asset class is available by accessing the appendix that accompanies the initial Presale Report. Please refer to ' Rhode Island Student Loan Authority, Series 2014-1 -- Appendix ', published on June 2, 2014 at www.fitchratings.com.

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

Applicable Criteria and Related Research:

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

--'Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria' (April 2014).

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=832660

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

Emily Lee

Director

+1 212-908-0667

Fitch Ratings, Inc.

33 Whitehall Street

New York, NY 10004

or

Secondary Analyst

Harry Kohl

Associate Director

+1 212-908-0866

or

Committee Chairperson

Michael Dean

Managing Director

+1 212-908-0556

or

Media Relations, New York

Sandro Scenga, +1 212-908-0278

sandro.scenga@fitchratings.com

Source: Fitch Ratings


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