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Fitch Rates Navient Student Loan Trust 2015-2Fitch Ratings assigns ratings to Navient Student Loan Trust 2015-2 as follows: --$337,000,000 class A-1 notes 'AAAsf'; Outlook Stable; --$157,000,000 class A-2 notes 'AAAsf'; Outlook Stable; --$475,500,000 class A-3 notes 'AAAsf'; Outlook Stable; --$27,500,000 class B notes 'A+sf'; Outlook Stable. KEY RATING DRIVERS High Collateral Quality: The trust collateral consists of Federal Family Education Loan Program (FFELP) loans, including approximately 15% of rehab 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. at 'AAA'/Stable Outlook. Sufficient Credit Enhancement (CE): Cash flow scenarios for the class A and B notes were satisfactory under Fitch's 'AAAsf' and 'A+sf' stresses, respectively. CE is provided by overcollateralization (OC), excess spread and, for the class A notes, approximately 2.76% of subordination provided by the class B notes. A target OC amount equal to the greater of 1.0% of the adjusted pool balance and $1.5 million must be met before excess cash can be released. Adequate Liquidity Support: Liquidity support is provided by a reserve account sized at 0.50% of the initial student loan balance which is funded at closing. The required reserve account balance for any distribution dates prior to May 25, 2016 (the step-down date) is 0.50% of the current student loan balance. Thereafter, the requirement will be the greater of 0.25% of the current student loan balance and 0.10% of the initial student loan balance. Acceptable Servicing Capabilities: Navient Solutions, Inc. will service 100% of the trust's student loan pool. In Fitch's opinion, Navient Solutions, Inc. is an acceptable servicer 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 CE driven by positive excess spread given favorable basis factor conditions could lead to future upgrades. Key Rating Drivers and Rating Sensitivities are further described in the pre-sale report titled Navient Student Loan Trust 2015-2', and for a further discussion on the representations, warranties, and enforcement mechanisms available to investors in this transaction, please see the related presale appendix, dated April 8, 2015, 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' (August, 2014); --'Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria' (June, 2014). --'Representations, Warranties, and Enforcement Mechanisms in Global Structured Finance Transactions' (March, 2015). Applicable Criteria and Related Research: Representations, Warranties and Enforcement Mechanisms in Global Structured Finance Transactions http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=863817 Global Structured Finance Rating Criteria http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=864268 Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=750530 Additional Disclosure Solicitation Status http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=983495 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. |
