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TMCNet:  Fitch Affirms Panhandle-Plains Student Finance Corporation, 2001 Indenture of Trust's Ratings

[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 Stable.

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.

RATING SENSITIVITIES

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 upgrades.

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

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

U.S. Private Student Loan ABS Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=730956

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=859194

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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