KEY RATING DRIVERS
High Collateral Quality: The trust collateral consists of Federal Family Education Loan Program (FFELP) loans (including less than 2% of rehabilitated loans). In Fitch's opinion, the credit quality of the trust collateral is high based on the guaranties provided by the transaction's eligible guarantors and at least 97% reinsurance of principal and accrued interest provided by the
Sufficient Credit Enhancement: Cash flow scenarios for the notes were satisfactory under Fitch's stresses. At closing, total parity is expected to be 106.02%. Credit enhancement (CE) is provided by overcollateralization (OC) and excess spread. Excess spread will not be released to the issuer until all of the notes are no longer outstanding.
Adequate Liquidity Support: Liquidity support for the series 2014-1 notes is provided by an approximate
Acceptable Servicing Capabilities: Day-to-day servicing will be provided by the
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. For further discussion of Fitch's sensitivity analysis, please see the presale titled '
Additional information is available at 'www.fitchratings.com'.
--'Global Structured Finance Rating Criteria' (
--'Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria' (
--'Representations, Warranties and Enforcement Mechanism in Global Structured Finance Transactions' (
Representations, Warranties, and Enforcement Mechanisms in Global Structured Finance Transactions
Global Structured Finance Rating Criteria
Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria
Source: Fitch Ratings
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