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Fitch Affirms Arkansas Student Loan Authority Series 2012-1; Outlook StableFitch Ratings has affirmed the senior notes issued by Arkansas Student Loan Authority 2012-1 at 'AAAsf'. The Rating Outlook remains Stable. KEY RATING DRIVERS High Collateral Quality: The trust collateral is composed of 100% of Federal Family Education Loan Program (FFELP). 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 at least 97% reinsurance of principal and accrued interest provided by the U.S. Department of Education (ED). Sufficient Credit Enhancement (CE): Cash flow scenarios for the class A notes were satisfactory under Fitch's stresses. Total reported parity is 111.73%. Total CE is provided by overcollateralization (OC), and excess spread. Additionally, this trust is in turbo and no cash will be released until all notes are paid in full. Liquidity support is provided by a reserve account (0.25% of outstanding notes or $300,000). Acceptable Servicing Capabilities: Edfinancial Services is the servicer of this trust, with Nelnet acting as back-up servicer. In Fitch's opinion, both servicers are acceptable servicers of FFELP student loans. Fitch reviewed Arkansas Student Loan Authority 2012-1 using its existing and proposed FFELP ABS (News - Alert) criteria, listed below. RATING SENSITIVITIES Since FFELP student loan ABS 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. DUE DILIGENCE USAGE No third-party due diligence was provided or reviewed in relation to this rating action. Fitch has affirmed the following rating: Arkansas Student Loan Authority 2012-1: --Class A at 'AAAsf'; Outlook Stable. Additional information is available at www.fitchratings.com. Applicable Criteria Counterparty Criteria for Structured Finance and Covered Bonds (pub. 14 May 2014) https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=744158 Criteria for Interest Rate Stresses in Structured Finance Transactions and Covered Bonds (pub. 19 Dec 2014) https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=838868 Exposure Draft: Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria (pub. 18 Nov 2015) https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=872755 Global Structured Finance Rating Criteria (pub. 06 Jul 2015) https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=867952 Rating Criteria for Structured Finance Servicers (pub. 23 Apr 2015) https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=864375 Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria (pub. 23 Jun 2014) https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=750530 Related Research Arkansas Student Loan Authority, Series 2012-1 -- Appendix https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=751127 Additional Disclosures Dodd-Frank Rating Information Disclosure Form https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=995255 Solicitation Status https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=995255 Endorsement Policy https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31 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/20151124005907/en/ |
