TMCnet News

Fitch Affirms Rhode Island Student Loan Authority Series 2012-1
[July 23, 2014]

Fitch Affirms Rhode Island Student Loan Authority Series 2012-1


NEW YORK --(Business Wire)--

Fitch Ratings affirms the student loan notes issued by Rhode Island Student Loan Authority series 2012-1 (RISLA 2012-1) at 'AAAsf'. The Rating Outlook remains stable.

KEY RATING DRIVERS

High Collateral Quality: The trust collateral consists of 100% Federal Family Education Loan Program (FFELP) loans of which 9.47% are rehabilitated loans, as of March 2014. The credit quality of the trust collateral is high, in Fitch's opinion, based on the guarantees provided by the transaction's eligible guarantors and reinsurance provided by the U.S. Department of Education (ED) for at least 97% of principal and accrued interest. Fitch currently rates the U.S. 'AAA' with a Stable Outlook.

Credit Enhancement (CE): CE to the series 2012-1 notes is provided by overcollateralization. As of March 2014, reported parity is 105.57%. This is a turbo structure; therefore, no excess cash is released, and is instead used to pay down the notes.

Adequate Liquidity Support: Liquidity support is provided by a reserve account sized at the greater of $250,000 or 0.25% of outstanding notes, currently at $277,500, as of March 2014.

Acceptable Servicing Capabilities: Day-to-day servicing is provided by Nelnet Servicing, LLC. Fitch believes Nelnet Servicing, LLC to be an acceptable servicer at this time.

RATING SENSITIVITIES

Since the FFELP student loan ABS (News - Alert) relies 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.

Fitch has taken the following rating actions:

Rhode Island Student Loan Authority Series 2012-1:

-- Series 2012-1 affirmed at 'AAA'; Outlook Stable.

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' (June 23, 2014).



--' Rhode Island Student Loan Authority, Series 2012-1' (Sept. 18, 2012).

A comparison of the transaction's RW&Es to those of typical RW&Es for student loans is available by accessing the reports and links below:


--Rhode Island Student Loan Authority, Series 2012-1 -- Appendix (Sept. 18, 2012).

--'Representations, Warranties, and Enforcement Mechanisms in Global Structured Finance Transactions -- Amended' (April 17, 2012).

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=750530

Rhode Island Student Loan Authority, Series 2012-1

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=688523

Rhode Island Student Loan Authority, Series 2012-1 -- Appendix

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=689033

Representations, Warranties, and Enforcement Mechanisms in Global Structured Finance Transactions

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=676496

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=841154

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.


[ Back To TMCnet.com's Homepage ]