|[August 06, 2014]
Fitch to Rate South Carolina Student Loan Corp, 2014 Series; Presale Issued
NEW YORK --(Business Wire)--
Fitch Ratings expects to rate the South Carolina Student Loan
Corporation (SCSLC) Education Loan Revenue bonds, 2014 series, issued
from the South Carolina Student Loan Corp. - 1996 General Resolution, as
--$328,000,000 floating rate class A-1 notes 'AAAsf(exp)'; Outlook
--$100,000,000 floating rate class A-2 notes 'AAAsf(exp)'; Outlook
--$73,000,000 floating rate class B notes 'AAsf(exp)'; Outlook Stable.
KEY RATING DRIVERS
High Collateral Quality: The trust collateral is comprised 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. Fitch
currently rates the U.S. 'AAA' with Outlook Stable.
Sufficient Credit Enhancement: The cash flow results for the senior and
subordinate bonds were satisfactory under Fitch's 'AAA' stresses. At
closing, senior and total parities are expected to be 112.00% and
105.46%, respectively. Credit enhancement (CE) is provided by
overcollateralization, excess spread, and for the senior bonds,
subordination provided by the class B bonds. Excess cash cannot be
released from the trust until all the bonds are paid-in-full, with the
exception of a one-time cash release to the issuer on or before Sept. 3,
2014, provided the parity test is met.
Adequate Liquidity Support: Liquidity support is provided by a
$8,751,230 reserve account which will be funded at closing with the bond
proceeds. The required reserve account balance is the greater of (a) 1%
of the outstanding balance of the prior bonds and 0.25% of the
outstanding balance of the 2014 series bonds, (b) 0.10% of the original
principal of all bonds outstanding and (c) $750,000.
Acceptable Servicing Capabilities: Day-to-day servicing will be provided
by South Carolina Student Loan Corporation and Nelnet Servicing, LLC
will be the back-up servicer. All servicers have demonstrated adequate
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 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
Key Rating Drivers and Rating Sensitivities are further described in the
pre-sale report titled 'South Carolina Student Loan Corporation, 2014
Series', dated August 4, 2014, available on www.fitchratings.com,
or by clicking on the link.
Additional information is available at 'www.fitchratings.com'.
Applicable Criteria and Related Research:
--'Global Structured Finance Rating Criteria' (May 2014);
--'Rating U.S. Federal Family Education Loan Program Student Loan ABS
Criteria' (June 2014).
Applicable Criteria and Related Research: South Carolina Student Loan
Corporation 2014 Series (US ABS)
Global Structured Finance Rating Criteria - Effective from 20 May 2014
to 4 August 2014
Rating U.S. Federal Family Education Loan Program Student Loan ABS
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DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING
THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS.
AVAILABLE ON (News - Alert) THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'.
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OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES
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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
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