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Fitch Affirms Nelnet 2012-3; Outlook StableFitch Ratings has affirmed the Nelnet Student Loan Trust 2012-3 senior notes at 'AAAsf' and subordinate notes at 'AAsf'. The Rating Outlook remains Stable for both notes. KEY RATING DRIVERS High Collateral Quality: The trust collateral is comprised of 100% of Federal Family Education Loan Program (FFELP) loans including 9.7% of rehabilitated 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. Fitch rates the U.S. sovereign government at 'AAA' with Outlook Stable. Sufficient Credit Enhancement (CE): CE is provided by overcollateralization (OC; the excess of trust's asset balance over bond balance) and excess spread, and for the senior notes, subordination of the class B note. As of March 2015, total parity is 101.01% (1.00% CE) and senior parity is 104.55% (4.35% CE). The trust has been and will continue releasing cash given the Specified Overcollateralization Amount is the greater of 1.00% of the adjusted pool balance and $2,000,000 is maintained. Adequate Liquidity Support: Liquidity support is provided by a reserve account sized at the greater of 0.25% of the outstanding note balance and $424,300, currently equal to $747,545.85. Acceptable Servicing Capabilities: Day to day servicing is provided by Nelnet, ACS (News - Alert) Education Services Inc. (ACS) and EdFinancial. In Fitch's opinion, all servicers are acceptable servicers of FFELP student loans. RATING SENSITIVITIES Since the FFELP student loan ABS (News - Alert) relies 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: Nelnet Student Loan Trust 2012-3: --Class A note at 'AAAsf'; Outlook Stable; --Class B note at 'AAsf'; Outlook Stable; Additional information is available at 'www.fitchratings.com'. Applicable Criteria and Related Research: --'Global Structured Finance Rating Criteria' (March 31, 2015); --'Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria' (June 23, 2014); --'Nelnet Student Loan Trust 2012-3 - Appendix' (July 26, 2012); --'Representations, Warranties, and Enforcement Mechanisms in Global Structured Finance Transactions' (March 26, 2015). Applicable Criteria and Related Research: 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 Nelnet Student Loan Trust 2012-3 -- Appendix http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=685316 Representations, Warranties and Enforcement Mechanisms in Global Structured Finance Transactions http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=863817 Additional Disclosure Solicitation Status http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=985171 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. View source version on businesswire.com: http://www.businesswire.com/news/home/20150521006469/en/ |
