NEW YORK--(BUSINESS WIRE)--Fitch Ratings expects to rate Access to Loans for Learning Student Loan Corporation student loan backed notes, series 2013-I (ALLSLC series 2013-I) as follows:
--$435,800,000 class A, 'AAAsf(EXP)'; Rating Watch Negative;
--$11,000,000 class B, 'Asf(EXP)'; Outlook Stable.
KEY RATING DRIVERS
High Collateral Quality: The trust collateral consists of Federal Family Education Loan Program (FFELP) loans with guaranties provided by eligible guarantors and reinsurance provided by the U.S. Department of Education (ED) for at least 97% of principal and accrued interest.
Rating Watch Negative: All existing and new issuances of 'AAA' rated tranches of FFELP securitizations are on Rating Watch Negative following the revision of the long-term foreign and local currency Issuer Default Ratings (IDRs) of the U.S.
Sufficient Credit Enhancement: Cash flow scenarios for the notes were satisfactory under Fitch's stresses. At closing, senior and total parity are expected to be 103.5% and approximately 101.0%, respectively. Total credit enhancement (CE) is provided by overcollateralization (OC) and excess spread. The class A notes will also benefit from 2.46% subordination provided by the class B notes.
Adequate Liquidity Support: Liquidity support for the series 2013-I notes is provided by a $1,125,276 reserve fund (0.25% of the pool balance) which will be funded at closing with note proceeds.
Acceptable Servicing Capabilities: Day-to-day servicing will be provided by Sallie Mae Servicing (Sallie Mae, 53.1%), Great Lakes Education Loan Services Inc., (GLELSI, 42.2%), and Xerox Education Services Inc., (XEROX-ES, 4.7%). All servicers have demonstrated adequate servicing capabilities.
RATING SENSITIVITY
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 'ALLSLC 2013-I', dated Dec. 6, 2013.
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: Access to Loans for Learning
Student Loan Corporation, Series 2013-I (US ABS)
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=725997
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 -- Amended
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=810953
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