News Column

Fitch to Rate Navient Student Loan Trusts 2014-2 through 2014-7; Presale Issued

August 5, 2014

NEW YORK--(BUSINESS WIRE)-- Link to Fitch Ratings' Report: Navient Student Loan Trusts: 2014-2, 2014-3, 2014-4, 2014-5, 2014-6 and 2014-7 (US ABS) http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=754268

Fitch Ratings expects to rate Navient Student Loan Trusts 2014-2 through 2014-7. A full list of ratings follows at the end of this release.

KEY RATING DRIVERS

High Collateral Quality: Each trust's collateral consists of 100% Federal Family Education Loan Program (FFELP) consolidation loans, approximately 15% of which are rehabilitated loans. The credit quality of the trusts' collateral is high as the trust student loans are guaranteed for at least 97% principal and accrued interest by the U.S. Department of Education (ED). Fitch currently rates the U.S. at 'AAA' with a Stable Outlook.

Sufficient Credit Enhancement: The cash flow results for the class A and B notes in each trust were satisfactory under Fitch 'AAAsf' and 'AAsf' stresses, respectively. Total credit enhancement (CE) for each trust is provided by initial overcollateralization (OC) of approximately 2.3% of trust collateral balance, excess spread and, in the case of the class A notes, approximately 2.7% of subordination provided by the class B notes. A target OC amount equal to the greater of 4.50% of the adjusted pool balance and $2.75 million must be met before excess cash can be released.

Adequate Liquidity Support: Liquidity support is provided by a reserve account sized at 2.25% of initial student loan balance and funded at closing. The required reserve account balance for any distribution dates prior to Aug. 25, 2019 (the step-down date) is 2.25% of the current student loan balance; then on and after the step-down date, the greater of 0.25% of the current student loan balance and 0.10% of the initial student loan balance.

Acceptable Servicing Capabilities: Navient Solutions, Inc. (formerly known as Sallie Mae, Inc.) will service approximately 79% of each trust's student loan pool; Xerox Education Services, LLC (Xerox-ES) will service 13% of 2014-2 and 21% of each of 2014-3 through 2014-7 pools; Great Lakes Education Loan Services, Inc. (Great Lakes) will service 8% of 2014-2. In Fitch's opinion, all of the servicers are acceptable servicers 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 described in the pre-sale report titled 'Navient Student Loan Trusts: 2014-2, 2014-3, 2014-4, 2014-5, 2014-6 and 2014-7', dated Aug. 5, 2014, available on www.fitchratings.com, or by clicking on the link.

Fitch assigns expected ratings to the following:

Navient Student Loan Trust 2014-2

--$256,000,000 class A notes 'AAAsf(exp)'; Outlook Stable;

--$7,000,000 class B notes 'AAsf(exp)'; Outlook Stable.

Navient Student Loan Trust 2014-3

--$256,000,000 class A notes 'AAAsf(exp)'; Outlook Stable;

--$7,000,000 class B notes 'AAsf(exp)'; Outlook Stable.

Navient Student Loan Trust 2014-4

--$256,400,000 class A notes 'AAAsf(exp)'; Outlook Stable;

--$7,000,000 class B notes 'AAsf(exp)'; Outlook Stable.

Navient Student Loan Trust 2014-5

--$154,100,000 class A notes 'AAAsf(exp)'; Outlook Stable;

--$4,200,000 class B notes 'AAsf(exp)'; Outlook Stable.

Navient Student Loan Trust 2014-6

--$153,800,000 class A notes 'AAAsf(exp)'; Outlook Stable;

--$4,200,000 class B notes 'AAsf(exp)'; Outlook Stable.

Navient Student Loan Trust 2014-7

--$153,800,000 class A notes 'AAAsf(exp)'; Outlook Stable;

--$4,200,000 class B notes 'AAsf(exp)'; Outlook Stable.

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

Applicable Criteria and Related Research:

--'Global Structured Finance Rating Criteria' (May 20, 2014);

--'Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria' (June 23, 2014).

Applicable Criteria and Related Research:

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=754389

Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=750530

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=844974

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

Melvin Zhou, +1-212-908-0503

Director

Fitch Ratings, Inc.

33 Whitehall Street

New York, NY 10004

or

Secondary Analyst

Charlene M. Davis, +1-212-908-0213

Director

or

Committee Chairperson

Tracy Wan, +1-212-908-9171

Senior Director

or

Media Relations

Sandro Scenga, New York, +1-212-908-0278

sandro.scenga@fitchratings.com

Source: Fitch Ratings


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