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Fitch Takes Various Actions on NorthStar Education Finance, Inc. 2006-A Private Student Loan Trust
[February 04, 2016]

Fitch Takes Various Actions on NorthStar Education Finance, Inc. 2006-A Private Student Loan Trust


Fitch Ratings has downgraded the NorthStar Education Finance, Inc. 2006-A senior notes to 'AAsf' from 'AAAsf' and affirmed the subordinate notes at 'Asf'. The Rating Outlook remains Stable for all of the notes.

KEY RATING DRIVERS

The downgrade of the senior notes is due to insufficient loss coverage to sustain an 'AAA' rating under the 'AAA' credit stresses.

Collateral Quality: As of the Jan. 25, 2016 distribution date, the trust is collateralized by approximately $234.4 million of private student loans which are performing in line with initial expectations. The current cumulative gross defaults, as a percent of the repayment balance, are at 6.32% with approximately 39% pool factor. Additionally, Fitch calculated projected remaining defaults are in the 7% - 10% range.

Credit Enhancement (CE): CE is provided by overcollateralization and excess spread. Additionally, the class A and B notes benefit from subordination. The senior and total parity is 127.10% and 106.74%, respectively. Excess cash can be released from the trust as long as total parity is greater than 103% and all outstanding notes have at least 2.25% overcollateralization.

Liquidity Support: All the notes benefit from a liquidity support provided by a reserve account currently sized at $2,980,593.

Servicing Capabilities: Great Lakes Educational Loan Services, Inc. is the servicer of this trust. Fitch believes Great Lakes to be an acceptable servicer of private student loans.

RATING SENSITIVITIES

As Fitch's base case default proxy is derived primarily from historical collateral performance, actual performance may differ from the expected performance, resulting in higher loss levels than the base case. This will result in a decline in credit enhancement and remaining loss coverage levels available to the notes and may make certain note ratings susceptible to potential negative rating actions, depending on the extent of the decline in coverage.

DUE DILIGENCE USAGE

No third party due diligence was provided or reviewed in relation to this rating action.

Fitch has taken the following rating actions:

NorthStar Education Finance, Inc. 2006-A

--Class A-4 downgraded to 'AAsf' from 'AAAsf'; Outlook Stable;

--Class B affirmed at 'Asf'; 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

Global Structured Finance Rating Criteria (pub. 06 Jul 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=867952

U.S. Private Student Loan ABS (News - Alert) Criteria (pub. 31 Jul 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=868836

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=999089

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=999089

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.


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