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Fitch Affirms Kentucky Higher Education Student Loan Corp.Fitch Ratings has affirmed the ratings for the senior notes currently rated 'AAAsf' issued by Kentucky Higher Education Student Loan Corporation (KHESLC 2013-1). The Rating Outlook remains Stable. KEY RATING DRIVERS High Collateral Quality: The collateral consists of 100% of Federal Family Education Loan Program (FFELP) loans. 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. Sufficient Credit Enhancement: CE is provided by overcollateralization (OC; the excess of trust's asset balance over bond balance) and excess spread. As of the most current distribution, reported parity is at 104.85%. Cash can only be released to the issuer when the bonds are paid in full. Adequate Liquidity Support: Liquidity support is provided by a reserve account currently sized at $1,409,500. Acceptable Servicing Capabilities: KHESLC is responsible for day-to-day servicing of the trust and Nelnet Servicing LLC is the backup servicer. Fitch believes both are acceptable servicers of FFELP student loans. RATING SENSITIVITIES 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 upgrades. Fitch has affirmed the following: KHESLC series 2013-1 at 'AAAsf'; Outlook Stable. Additional information is available at 'www.fitchratings.com'. Applicable Criteria and Related Research: --'Global Structured Finance Rating Criteria' (Aug. 4, 2014; --'Rating U.S. Federal Family Eucation Loan Program Student Loan ABS Criteria' (June 23, 2014). 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: --'Kentucky Higher Education Student Loan Corporation, Series 2013-1 - Appendix'(Jan. 28, 2013); --'Representations, Warranties, and Enforcement Mechanisms in Global Structured Finance Transactions' (Oct. 31, 2014). Applicable Criteria and Related Research: Global Structured Finance Rating Criteria http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=754389 Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=750530 Kentucky Higher Education Student Loan Corporation, Series 2013-1 (US ABS) http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=699889 Representations, Warranties and Enforcement Mechanisms in Global Structured Finance Transactions http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=799248 Additional Disclosure Solicitation Status http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=978609 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. |
