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TMCNet:  Fitch Rates Navient Student Loan Trust 2014-1

[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 as follows:

--$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 $748,891.

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 the trust.

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 student loans.

RATING SENSITIVITY

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 upgrades.

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

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=748821

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

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=708795

Navient Student Loan Trust 2014-1 (US Student Loans)

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=748396

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=832175

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 (News - Alert) 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.


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