NEW YORK--(BUSINESS WIRE)--Fitch Ratings upgrades the subordinate class of National Collegiate Trust 2005-GATE (NCT 2005-GATE) to 'Asf' from 'BBB-sf' and revises the Outlook to Stable from Positive. The senior notes are paid in full.
KEY RATING DRIVERS
Adequate Collateral Quality:
As of Sept. 26, 2013, the trust is collateralized by approximately $55.3 million private student loans originated by Bank of America under First Marblehead Corp's GATE Program.
Sufficient Credit Enhancement:
Credit enhancement (CE) is provided by overcollateralization (the excess of the trust's asset balance over the bond balance) and excess spread. The transaction's CE is sufficient to provide loss coverage multiple corresponding to Fitch's 'A' rating category. As of Sept. 26, 2013, the current parity ratio for NCT 2005-GATE is 104.86%, with the trust's release level at 104%. Based on the trust's performance, Fitch estimates remaining defaults to be 5% to 7% of current principal balance. Recovery is assumed to be 30%, given consideration for the portion of the loans that are guaranteed by Bank of America.
Adequate Liquidity Support:
Liquidity support is provided by a General Reserve Account sized at $1,000,085.
Satisfactory Servicing Capabilities:
Day-to-day servicing is provided by PHEAA. Fitch believes the servicing operations are acceptable at this time.
RATING SENSITIVITIES
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 notes and may make certain note 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 trusts.
Fitch takes the following rating action:
National Collegiate Trust 2005-GATE
--Class B upgraded to 'Asf' from 'BBB-sf'; Outlook revised to Stable from Positive.
Additional information is available at 'www.fitchratings.com'.
Applicable Criteria and Related Research:
--'U.S. Private Student Loan ABS Criteria', Jan. 29, 2013;
--'Global Structured Finance Rating Criteria', May 24, 2013.
Applicable Criteria and Related Research:
U.S. Private Student Loan ABS Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=698293
Global Structured Finance Rating Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=708661
Additional Disclosure
Solicitation Status
http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=809227
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