NEW YORK--(BUSINESS WIRE)--Fitch Ratings has affirmed the senior notes at 'AAAsf' and upgrades the subordinate note to 'Asf' from 'BBsf' issued by Chase Education Loan Trust 2007-A. The Rating Outlook on the senior notes, which is tied to the sovereign rating of the U.S. government, remains Negative. The Rating Watch Positive on the subordinate note has been removed and assigned a Stable Outlook.
Fitch used its 'Global Structured Finance Rating Criteria' and 'Rating U.S. Federal Family Education Loan Program Student Loan ABS' to review the ratings.
KEY RATING DRIVERS
The affirmation on the senior notes and the upgrade on subordinate note are based on stable trust performance and the sufficient level of credit enhancement to cover the applicable risk factor stresses. While both the senior and subordinate notes will benefit from future excess spread, the senior notes also benefit from subordination provided by the class B note.
The total parity ratio has been stable and the senior parity ratio has been increasing. The senior parity is currently 105.31% and total parity is 100% as of June 2013.
In Fitch's analysis, the notes passed the cash flows corresponding to their rating stresses.
RATING SENSITIVITIES
Since FFELP student loan ABS rely on the U.S. government to reimburse defaults, 'AAA'sf 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.
Prior to today's upgrade class B of Chase Education Loan Trust 2007-A was on Rating Watch Positive.
Fitch has taken the following rating actions:
Chase Education Loan Trust 2007-A:
--Class A-2 affirmed at 'AAAsf'; Outlook Negative;
--Class A-3 affirmed at 'AAAsf'; Outlook Negative;
--Class A-4 affirmed at 'AAAsf'; Outlook Negative;
--Class B upgraded to 'Asf' from 'BBsf'; removed from Rating Watch Positive; Outlook Stable.
Additional information is available at 'www.fitchratings.com'
Applicable Criteria and Related Research:
--'Global Structured Finance Rating Criteria' (May 24, 2013);
--'Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria' (May 17, 2013).
Applicable Criteria and Related Research:
Global Structured Finance Rating Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=708661
Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria - Effective Apr. 7, 2011 to Apr. 3, 2012
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=616766
Additional Disclosure
Solicitation Status
http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=801245
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