NEW YORK--(BUSINESS WIRE)--Fitch Ratings affirms the ratings on student loan notes issued by KeyCorp Student Loan Trust 2005-A (Group II).The Rating Outlook remains Negative. Fitch's 'U.S. Private SL ABS Criteria' and 'Global Structured Finance Rating Criteria' were used to review the ratings. A complete list of rating actions is detailed at the end of this release.
The affirmation on all student loan notes are based on sufficient loss coverage multiples commensurate with the ratings. The Negative Outlook is maintained on all the notes, and is consistent with Fitch's negative view of the private student loan sector in general. As of September 2011, parity, including the reserve account, for the class II-A, II-B, and II-C notes are at 155.62%, 115.61%, and 103.04%, respectively. Review of KeyCorp Student Loan Trust 2005-A (Group II) is based on collateral performance data as of September 2011.
The loss coverage multiples were determined by comparing the projected net loss amount to available credit enhancement for the rating categories of KeyCorp Student Loan Trust 2005-A (Group II). Fitch used both data provided by KeyCorp and proxy data from other issuers to form a loss timing curve representative of each pool depending on loan composition. After giving credit to the seasoning of loans in repayment, Fitch applied the trust's current cumulative gross level to the loss timing curve to derive the expected gross losses over the projected remaining life. A recovery rate of 15% was applied, which was the level that was assumed during at the trust's initial review.
Credit enhancement consists of subordination, excess spread, overcollateralization (OC), and a reserve account for the II-A and II-B notes. The class II-C notes benefit from OC, excess spread and the reserve account. Fitch assumed excess spread to be the lesser of the current annualized excess spread; the average historical excess spread; and the most recent 12-month average spread, and applied that same rate over the remaining life.
The private student loan collateral consists primarily of Key Alternative Loans originated to undergraduate students. The trusts also include a combination of graduate student loans, career loans, consolidation loans, and CampusDoor loans marketed through the direct to consumer channel.
Fitch has affirmed the following ratings:
KeyCorp Student Loan Trust 2005-A (Group II):
--Class II-A-2 at 'AAsf'; Outlook Negative;
--Class II-A-3 at 'AAsf'; Outlook Negative;
--Class II-A-4 at 'AAsf'; Outlook Negative;
--Class II-B at 'BBBsf'; Outlook Negative;
--Class II-C at 'BBsf'; Outlook Negative.
Additional information is available at 'www.fitchratings.com'. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.
Applicable Criteria and Related Research:
--'U.S. Private Student Loan ABS Criteria', July 19, 2011;
--'Global Structured Finance Rating Criteria', Aug. 4, 2011;
--'Counterparty Criteria for Structured Finance Transactions', March 14, 2011.
Applicable Criteria and Related Research:
U.S. Private Student Loan ABS Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=634449
Global Structured Finance Rating Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=646569
Counterparty Criteria for Structured Finance Transactions
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=605425
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