A detailed list of rating actions follows at the end of this press release.
KEY RATING DRIVERS
Collateral Quality: The trust is collateralized by approximately
Negative Outlook: The Negative Outlook is maintained due to the interest rate risk embedded in the tax-exempt auction rate securities which makes up 100% of the outstanding bonds. Despite the SWAPS in place, the trust is still exposed to high interest rate risk, since they are receiving SIFMA, whereas all the bonds interests are currently paying the maximum rate of 2x SIFMA. The trust also does not benefit from a net loan rate and as such interest rates can increase to a maximum rate of either 12% or 14%, depending on the bond.
Credit Enhancement (CE): CE is provided by overcollateralization and excess spread. As of the
Servicing Capabilities: Day-to-day servicing is provided by NJHESAA. Fitch believes the servicing operations are acceptable at this time.
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 bonds and may make certain bond 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 has affirmed the following
--Series 2002-A at 'BBBsf';
--Series 2002-C at 'BBBsf';
--Series 2002-D at 'BBBsf';
--Series 2003-A at 'BBBsf';
--Series 2003-C at 'BBBsf';
--Series 2003-D at 'BBBsf';
--Series 2004-A at 'BBBsf';
--Series 2004-D at 'BBBsf';
--Series 2005-A at 'BBBsf';
--Series 2005-B at 'BBBsf';
--Series 2005-C at 'BBBsf';
--Series 2005-D at 'BBBsf';
--Series 2006-A at 'BBBsf';
--Series 2006-B at 'BBBsf';
--Series 2006-D at 'BBBsf';
--Series 2007-B at 'BBBsf';
--Series 2007-D at 'BBBsf'.
Additional information is available at 'www.fitchratings.com'.
--'U.S. Private Student Loan ABS Criteria',
--'Global Structured Finance Rating Criteria',
Global Structured Finance Rating Criteria
U.S. Private Student Loan ABS Criteria
Source: Fitch Ratings
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