Fitch Maintains Negative Rating Watch on Louisiana Public Facilities Authority 2011A

NEW YORK--()--Fitch Ratings maintains the Negative Rating Watch on the notes currently rated 'AAAsf' issued by Louisiana Public Facilities Authority 2011A.

KEY RATING DRIVERS

High Collateral Quality: The collateral consists of 100% of Federal Family Education Loan Program (FFELP) loans. In Fitch's opinion, the credit quality of the trust collateral is high, 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.

Rating Watch Maintained: 'AAAsf' rated tranches of U.S. FFELP student loan ABS are maintained on Rating Watch Negative following the revision of the U.S. sovereign rating on Oct. 15, 2013.

Sufficient Credit Enhancement: CE is provided by overcollateralization (OC; the excess of trust's asset balance over bond balance) and excess spread. As of December 2013, parity is at 109.34%. The parity ratio is expected to continue to rise, as the trust is in turbo, and no funds will be released until the notes are paid in full.

Adequate Liquidity Support: Liquidity support is provided by a Debt Service Reserve Fund currently sized at $967,839. In addition, the trust must maintain a minimum deposit of $1 million in the Collection Fund, which can be used to pay government rebates, program expenses, bond interest and bond principal at maturity, and if tapped, will be automatically replenished on the following distribution date.

Acceptable Servicing Capabilities: Edfinancial (97.58%) and Nelnet (2.42%) are responsible for day-to-day servicing of the trust. Fitch believes Edfinancial and Nelnet to be acceptable servicers of FFELP student loans. Nelnet Servicing, LLC is the backup servicer for Edfinancial.

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 CE driven by positive excess spread given favorable basis factor conditions could lead to future upgrades.

Fitch has taken the following rating actions:

Louisiana Public Facilities Authority 2011A:

--Class A-2 at 'AAAsf'; Negative Rating Watch maintained;

--Class A-3 at 'AAAsf'; Negative Rating Watch maintained.

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

Applicable Criteria and Related Research:

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

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

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 - Effective Apr. 7, 2011 to Apr. 3, 2012

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=616766

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=817690

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Contacts

Fitch Ratings
Primary Analyst
Harry Kohl, +1-212-908-0837
Associate Director
Fitch Ratings, Inc.
One State Plaza
New York, NY 10004
or
Committee Chairperson
Tracy Wan, +1-212-908-9171
Senior Director
or
Media Relations, New York
Sandro Scenga, +1-212-908-0278
sandro.scenga@fitchratings.com

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Contacts

Fitch Ratings
Primary Analyst
Harry Kohl, +1-212-908-0837
Associate Director
Fitch Ratings, Inc.
One State Plaza
New York, NY 10004
or
Committee Chairperson
Tracy Wan, +1-212-908-9171
Senior Director
or
Media Relations, New York
Sandro Scenga, +1-212-908-0278
sandro.scenga@fitchratings.com