NEW YORK--(BUSINESS WIRE)--Fitch Ratings has affirmed the senior and subordinate student loan notes issued by Iowa Student Loan Liquidity Corporation 2005-1 at 'AAAsf' and 'A+sf', respectively. The Rating Outlooks on the senior notes, which are tied to the sovereign rating of the U.S. government, remain Negative, while the Rating Outlook on the subordinate note remains Stable.
KEY RATING DRIVERS
The ratings on the senior and subordinate notes are affirmed based on the sufficient level of credit enhancement to cover the applicable risk factor stresses. Credit enhancement for the senior and subordinate notes consists of overcollateralization and projected minimum excess spread, while the senior notes also benefit from subordination provided by the class B note.
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.
Fitch has affirmed the following ratings:
Iowa Student Loan Liquidity Corporation 2005-1:
--Class A-2 at 'AAAsf'; Outlook Negative;
--Class A-3 at 'AAAsf'; Outlook Negative;
--Class B at 'A+sf'; Outlook Stable.
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:
--'Global Structured Finance Rating Criteria' dated June 6, 2012;
--'Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria' dated April 3, 2012.
Applicable Criteria and Related Research
Global Structured Finance Rating Criteria
Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria