|[August 27, 2014]
Fitch Affirms Panhandle-Plains Student Finance Corporation, 2001 Indenture of Trust's Ratings
NEW YORK --(Business Wire)--
Fitch Ratings affirms the ratings on the class A and B notes issued from
Panhandle-Plains Student Finance Corporation pursuant to the 2001
Indenture of Trust (PPSFC 2001). The Rating Outlook is maintained at
KEY RATING DRIVERS
High Collateral Quality: The trust collateral is comprised of 72.85% of
Federal Family Education Loan Program (FFELP) loans and 27.15% private
student loans. The FFELP loans benefit from 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
maintains rating of 'AAA' Outlook Stable on the United States. The
projected remaining defaults as a percent of the current pool balance on
the private student loans are expected to range between 7% and 10% using
proxy data. A recovery rate of 15% was applied, which was determined to
be appropriate based on data provided by the issuer.
Sufficient Credit Enhancement: Credit Enhancement is provided by
overcollateralization, excess spread and for the class A notes,
subordination provided by the class B notes. As of the July 2014
distribution date, the reported senior and total parity for PPSFC 2001
are 149.47% and 130.64% respectively. Since the trust documents require
that a rating agency confirmation is required to release cash, assuming
the trust satisfies the 103% total parity cash release level, Fitch
gives credit up to the current reported total parity which is 130.64% as
of the last distribution date.
Adequate Liquidity Support: Liquidity support is provided by a reserve
account where the balance is determined as the greater 2.00% of the
outstanding note balance, or (b) $500,000.
Acceptable Servicing Capabilities: ACS (News - Alert) Education Services, Inc, a
subsidiary of the Xerox Corporation, and Navient Solutions, Inc., as
sub-servicers, are responsible for the day-to-day servicing of this
trust. In Fitch's opinion, these sub-servicers are acceptable servicers
of FFELP and private student loans.
Since FFELP student loan asset backed securities rely on the U.S.
government to reimburse defaults, 'AAAsf' FFELP ABS (News - Alert) ratings will likely
move in tandem with the 'AAA' U.S. sovereign rating. Aside from the U.S.
sovereign rating, defaults account for the majority of the risk embedded
in private student loans . Additional defaults on FFELP and private
student loans and basis shock beyond Fitch's published stresses could
result in future downgrades. ikewise, a buildup of credit enhancement
driven by positive excess spread given favorable basis factor conditions
and better performance from private student loans could lead to future
Fitch has taken the following rating actions:
Panhandle-Plains Student Finance Corp., Student Loan Asset-Backed Notes,
2001 Indenture of Trust:
-- Series 2001 A-1 affirmed at 'AAAsf'; Outlook Stable;
-- Series 2001 A-2 affirmed at 'AAAsf'; Outlook Stable;
-- Series 2001 B-1 affirmed at 'Asf'; Outlook Stable.
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);
--'U.S. Private Student Loan ABS Criteria' (January 2014).
Applicable Criteria and Related Research:
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
U.S. Private Student Loan ABS Criteria
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