NEW YORK--(BUSINESS WIRE)--Fitch Ratings has affirmed the ratings on the Student Loan Corporation (SLC) Private Student Loan Trust's 2006-A notes issued by the SLC. The Rating Outlook remains Negative on series 2006-A. Fitch has placed series 2009-A on Rating Watch Negative. A detailed list of rating actions follows at the end of this press release.
Fitch's Global Structured Finance Rating Criteria and Private Student Loan Asset-Backed Securities (ABS) Criteria were used to review the transaction.
The calculated loss coverage multiples for the series 2006-A notes are sufficient to support the ratings listed below. The Outlook remains Negative on series 2006-A because of Fitch's negative view of the private student loan sector in general and not due to the performance of the trust. Fitch has placed the series 2009-A notes on Rating Watch Negative as defaults have significantly increased over the past year from 9.87% to 12.61% of the original loan pool balance causing a deterioration in loss coverage multiples. Although parity is 179.06%, credit enhancement levels may no longer be able to absorb the level of increased defaults projected for the remaining life of the transaction. Fitch will continue to collect default information and monitor the trust's performance to determine if any further rating action is required.
Credit enhancement consists of excess spread and overcollateralization, while the series 2006-A senior notes also benefit from subordination provided by the class B and class C notes. Fitch assumed excess spread to be the lesser of the average historical excess spread (earnings on the assets minus interest payments to bondholders and fees) and the most recent 12-month average excess spread, and applied that same rate over the stressed projection of remaining life.
The SLC Private Student Loan Trust, series 2006-A is serviced and administered by Discover Bank, rated 'BBB/F2', Outlook Stable by Fitch. The SLC Private Student Loan Trust, series 2009-A is serviced and administered by Citibank, N.A, rated 'A/F1' Outlook Stable by Fitch.
Fitch takes the following rating actions on SLC Private Student Loan Trust notes:
SLC Private Student Loan Trust 2006-A
--Senior class A-4 at 'AAAsf'; Outlook Negative;
--Senior class A-5 at 'AAAsf'; Outlook Negative;
--Subordinate class B at 'AAsf'; Outlook Negative;
--Junior subordinate class C at 'Asf'; Outlook Negative.
SLC Private Student Loan Trust 2009-A
--Senior class A at 'AAAsf'; Rating Watch 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' Jan. 31, 2012;
--'Global Structured Finance Rating Criteria' June 6, 2012.
Applicable Criteria and Related Research
U.S. Private Student Loan ABS Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=698293
Global Structured Finance Rating Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=679923
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