NEW YORK--(BUSINESS WIRE)--Fitch Ratings affirms the ratings of the student loan revenue bonds issued by Massachusetts Educational Financing Authority (MEFA), Issue J series 2011 and 2012 at 'Asf'. The Rating Outlook remains Stable.
A detailed list of rating actions follows at the end of this press release.
KEY RATING DRIVERS
Adequate Collateral Quality: The trust is collateralized by approximately $255 million of private student loans as of December 2013. The loans were originated under MEFA's Fixed Rate Loan Program.
Sufficient Credit Enhancement (CE): CE is provided by overcollateralization (the excess of trust's asset balance over bond balance) and excess spread. The total parity ratio is currently 108.83%. The trust is not releasing any excess cash as it has not reached its release parity threshold of 109%
Sufficient Liquidity Support: is provided by a $5.4 million debt service reserve fund. Fitch projected remaining defaults to range between 9%-11% as of the current principal balance based on data provided by MEFA. A recovery rate of 30% was applied which was determined to be appropriate based on data provided by the issuer.
Satisfactory Servicing Capabilities: Day-to-day servicing is provided by ACS Education Services. Fitch believes the servicing operations are acceptable at this time.
RATING SENSITIVITIES
As Fitch's base case default proxy is derived primarily from historical collateral performance, actual performance may differ from the expected performance, resulting in higher loss levels than the base case. This will result in a decline in CE and remaining loss coverage levels available to the notes and may make certain note ratings susceptible to potential negative rating actions, depending on the extent of the decline in coverage. Fitch will continue to monitor the performance of the trust.
Fitch affirms the following ratings:
Massachusetts Educational Financing Authority (MEFA) Education Loan Revenue Bonds, Issue J series 2011 and series 2012:
--$530,000 series 2011 maturing on 7/1/2017 at 'Asf'; Outlook Stable;
--$4,835,000
series 2011 maturing on 7/1/2018 at 'Asf'; Outlook Stable;
--$1,095,000
series 2011 maturing on 7/1/2019 at 'Asf'; Outlook Stable;
--$4,385,000
series 2011 maturing on 7/1/2019 at 'Asf'; Outlook Stable;
--$955,000
series 2011 maturing on 7/1/2020 at 'Asf'; Outlook Stable;
--$5,000,000
series 2011 maturing on 7/1/2020 at 'Asf'; Outlook Stable;
--$6,460,000
series 2011 maturing on 7/1/2021 at 'Asf'; Outlook Stable;
--$7,010,000
series 2011 maturing on 7/1/2022 at 'Asf'; Outlook Stable;
--$7,610,000
series 2011 maturing on 7/1/2023 at 'Asf'; Outlook Stable;
--$8,255,000
series 2011 maturing on 7/1/2024 at 'Asf'; Outlook Stable;
--$8,960,000
series 2011 maturing on 7/1/2025 at 'Asf'; Outlook Stable;
--$9,680,000
series 2011 maturing on 7/1/2026 at 'Asf'; Outlook Stable;
--$11,180,000
series 2011 maturing on 7/1/2027 at 'Asf'; Outlook Stable;
--$7,130,000
series 2011 maturing on 7/1/2028 at 'Asf'; Outlook Stable;
--$7,835,000
series 2011 maturing on 7/1/2029 at 'Asf'; Outlook Stable;
--$11,950,000
series 2011 maturing on 7/1/2033 at 'Asf'; Outlook Stable;
--$1,465,000
series 2012 maturing on 7/1/2018 at 'Asf'; Outlook Stable;
--$6,085,000
series 2012 maturing on 7/1/2018 at 'Asf'; Outlook Stable;
--$410,000
series 2012 maturing on 7/1/2019 at 'Asf'; Outlook Stable;
--$13,295,000
series 2012 maturing on 7/1/2019 at 'Asf'; Outlook Stable;
--$590,000
series 2012 maturing on 7/1/2020 at 'Asf'; Outlook Stable;
--$14,635,000
series 2012 maturing on 7/1/2020 at 'Asf'; Outlook Stable;
--$560,000
series 2012 maturing on 7/1/2021 at 'Asf'; Outlook Stable;
--$15,950,000
series 2012 maturing on 7/1/2021 at 'Asf'; Outlook Stable;
--$17,650,000
series 2012 maturing on 7/1/2022 at 'Asf'; Outlook Stable;
--$16,900,000
series 2012 maturing on 7/1/2023 at 'Asf'; Outlook Stable;
--$18,225,000
series 2012 maturing on 7/1/2024 at 'Asf'; Outlook Stable;
--$16,575,000
series 2012 maturing on 7/1/2025 at 'Asf'; Outlook Stable;
--$13,370,000
series 2012 maturing on 7/1/2026 at 'Asf'; Outlook Stable;
--$2,545,000
series 2012 maturing on 7/1/2027 at 'Asf'; Outlook Stable;
--$25,730,000
series 2012 maturing on 7/1/2028 at 'Asf'; Outlook Stable;
--$4,350,000
series 2012 maturing on 7/1/2030 at 'Asf'; Outlook Stable.
Additional information is available at www.fitchratings.com.
Applicable Criteria and Related Research:
--'U.S. Private Student
Loan ABS Criteria', Jan 29, 2014;
--'Global Structured Finance
Rating Criteria', May 24, 2013;
--'Massachusetts Educational
Financing Authority, Series 2012', May 22, 2012.
A comparison of the transaction's RW&Es to those of typical RW&Es for
student loans is available by accessing the reports and links below:
--'Massachusetts
Educational Financing Authority, Series 2012 - Appendix' dated May 22,
2012;
--'Representations, Warranties, and Enforcement Mechanisms in
Global Structured Finance
Transactions - Amended', dated April 17,
2012.
Applicable Criteria and Related Research:
U.S. Private Student Loan
ABS Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=730956
Global
Structured Finance Rating Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=708661
Massachusetts
Educational Financing Authority, Series 2012 (US ABS)
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=679912
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=827135
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