|[May 29, 2014]
Fitch Rates Navient Student Loan Trust 2014-1
NEW YORK --(Business Wire)--
Fitch Ratings has assigned ratings to Navient Student Loan Trust 2014-1
--$216,000,000 floating rate class A-1 notes 'AAAsf'; Outlook Stable;
--$101,000,000 floating rate class A-2 notes 'AAAsf'; Outlook Stable;
--$350,000,000 floating rate class A-3 notes 'AAAsf'; Outlook Stable;
--$60,000,000 floating rate class A-4 notes 'AAAsf'; Outlook Stable;
--$20,000,000 floating rate class B notes 'A+sf'; 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.
Sufficient Credit Enhancement: Cash flow scenarios for class A and B
notes were satisfactory under Fitch's stresses. At closing, total parity
is expected to be 100.90% and senior parity is expected to be 103.68%.
Total credit enhancement (CE) is provided by overcollateralization (OC;
about $6.759 million at closing), excess spread and, in the case of
class A notes, 2.68% subordination provided by the class B notes.
Adequate Liquidity Support: Liquidity support for the Navient SLT 2014-1
notes is provided by a $4,867,795 reserve account (0.65% of initial
student loan balance) and funded at closing. The required reserve
account balance for any distribution dates prior to June 25, 2015 is
0.65% of the current student loan balance; then on and after the
stepdown date (June 25, 2015), the greater of 0.25% of the current
student loan balance, 0.10% of the initial student loan balance or
Targeted OC Level: CE must build to the greater of 1.25% of the adjusted
pool balance, or $2.5 million before excess cash may be released from
Acceptable Servicing Capabilities: Navient Solutions, Inc. (formerly
known as Sallie Mae, Inc.), as servicer, will be responsible for
servicing the portfolio. Fitch has reviewed the servicing operations of
Navient Solutions and believes it to be acceptable servicer of FFELP
Since FFELP student loan ABS (News - Alert) 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 shoc
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
Key Rating Drivers and Rating Sensitivities are further described in the
pre-sale report titled Navient Student Loan Trust 2014-1', dated May 14,
2014, available on www.fitchratings.com.
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' (May 17, 2013);
--'Navient Student Loan Trust 2014-1' (May 14, 2014).
Applicable Criteria and Related Research:
Global Structured Finance Rating Criteria
Rating U.S. Federal Family Education Loan Program Student Loan ABS
Navient Student Loan Trust 2014-1 (US Student Loans)
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