Fitch Maintains Rating Watch on NHHELCO, Series 2012-1

NEW YORK--()--Fitch Ratings maintains the Negative Rating Watch on the series 2012-1 note currently rated 'AAAsf' issued by New Hampshire Higher Education Loan Corporation (NHHELCO) series 2012-1.

On Oct. 16, Fitch placed 766 'AAAsf' rated tranches of U.S. FFELP student loan ABS on Rating Watch Negative following the revision of the U.S. sovereign rating on Oct. 15. For further details, see the press release dated Oct. 16, 2013, 'Fitch Places 'AAAsf' Rated U.S. FFELP Student Loan Tranches on Rating Watch Negative'.

KEY RATING DRIVERS

High Collateral Quality: The trust collateral consists of 100% of Federal Family Education Loan Program (FFELP) loans. 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 reinsurance provided by the U.S. Department of Education (ED) for at least 97% of principal and accrued interest.

Sufficient Credit Enhancement: CE is provided by overcollateralization (OC; the excess of trust's asset balance over bond balance) and excess spread. As of September 2013, total parity is 104.07% (3.91% CE). The trust is a full turbo structure therefore no cash is released until the note is paid in full.

Adequate Liquidity Support: Liquidity support for note is provided by a reserve account (0.25% of pool balance or $359,273) and a capitalized interest account of $500,029 balance, which will be released on the December 2013 monthly distribution date.

Acceptable Servicing Capabilities: Granite State Management Resources, as servicer, is responsible for servicing the trust, with Nelnet Servicing as the back-up servicer. Fitch believes Granite State Management Resources and Nelnet Servicing are acceptable servicers of FFELP student loans.

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.

Fitch has taken the following rating action:

New Hampshire Higher Education Loan Corporation series 2012-1:

--Series 2012-1 Rating Watch Negative maintained.

A comparison of the transaction's representations, warranties, and enforcement mechanisms (RW&Es) to those of typical RW&Es for FFELP asset-backed securities is available in the presale appendix. This presale appendix and Fitch's special report on 'Representations, Warranties, and Enforcement Mechanisms on Global Structured Finance Transactions,' may be accessed via the links provided below.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research:

--'Global Structured Finance Rating Criteria' dated May 24, 2013;

--'Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria' dated May 17, 2013;

--'New Hampshire Higher Education Loan Corporation, Series 2012-1 -- Appendix' dated Dec. 3, 2012;

--'Representations, Warranties, and Enforcement Mechanisms in Global Structured Finance Transactions - Amended' dated April 17, 2012.

Applicable Criteria and Related Research:

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=708661

Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria -- Amended

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=708795

New Hampshire Higher Education Loan Corporation, Series 2012-1 -- Appendix

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=696416

Representations, Warranties, and Enforcement Mechanisms in Global Structured Finance Transactions -- Amended

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=676496

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=810403

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Contacts

Fitch Ratings
Primary Analyst
Paul Jiang, Analyst, +1-212-908-9120
Fitch Ratings, Inc.
One State Street Plaza
New York, NY 10004
or
Committee Chairperson
Tracy Wan, Senior Director, +1-212-908-9171
or
Media Relations
Sandro Scenga, +1-212-908-0278
New York
sandro.scenga@fitchratings.com

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Contacts

Fitch Ratings
Primary Analyst
Paul Jiang, Analyst, +1-212-908-9120
Fitch Ratings, Inc.
One State Street Plaza
New York, NY 10004
or
Committee Chairperson
Tracy Wan, Senior Director, +1-212-908-9171
or
Media Relations
Sandro Scenga, +1-212-908-0278
New York
sandro.scenga@fitchratings.com