Fitch to Rate Navient Student Loan Trust 2014-1; Presale Issued

NEW YORK--()--Fitch Ratings expects to rate Navient Student Loan Trust 2014-1 as follows:

--$216,000,000 floating rate class A-1 notes 'AAAsf(exp)'; Outlook Stable;

--$101,000,000 floating rate class A-2 notes 'AAAsf(exp)'; Outlook Stable;

--$350,000,000 floating rate class A-3 notes 'AAAsf(exp)'; Outlook Stable;

--$60,000,000 floating rate class A-4 notes 'AAAsf(exp)'; Outlook Stable;

--$20,000,000 floating rate class B notes 'A+sf(exp)'; Outlook Stable.

KEY RATING DRIVERS

High Collateral Quality: The trust collateral consists of Federal Family Education Loan Program (FFELP) loans with guaranties provided by eligible guarantors and reinsurance provided by the U.S. Department of Education (ED) for at least 97% of principal and accrued interest. Fitch affirmed and assigned Outlook Stable to the U.S. Sovereign rating on March 24, 2014.

Sufficient Credit Enhancement: The cash flow results for the class A and B notes were satisfactory under Fitch 'AAAsf' and 'Asf' stresses, respectively. At closing, total parity is expected to be approximately 100.90% and senior parity is expected to be 103.68%. Total credit enhancement (CE) at closing is provided by overcollateralization of $6,759,293, excess spread and, in the case of the class A notes, approximately 2.67% subordination provided by the class B notes. A target OC amount equal to the greater of 1.25% of the adjusted pool balance and $2.5 million must be met before excess cash can be released from the trust.

Adequate Liquidity Support: Liquidity support for the Navient SLT 2014-1 notes is provided by a $4,867,795 reserve account (0.65% of initial student loan balance) and funded at closing. The required reserve account balance for any distribution dates prior to June 25, 2015 is 0.65% of the current student loan balance; then on and after the stepdown date (June 25, 2015), the greater of 0.25% of the current student loan balance, 0.10% of the initial student loan balance or $748,891.

Acceptable Servicing Capabilities: Navient Solutions, Inc. (formerly known as Sallie Mae, Inc.), as servicer, will be responsible for servicing the portfolio. Fitch has reviewed the servicing operations of Navient Solutions and believes it to be acceptable servicer of FFELP student loans.

RATING SENSITIVITY

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.

Key Rating Drivers and Rating Sensitivities are further described in the pre-sale report titled 'Navient Student Loan Trust 2014-1', dated May 12, 2014, available on www.fitchratings.com, or by clicking on the link.

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: Navient Student Loan Trust 2014-1 (US Student Loans)

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=748396

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

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

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=830195

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Contacts

Fitch Ratings
Primary Analyst
Emily Lee
Director
+1 212-908-0667
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Secondary Analyst
Charlene M. Davis
Director
+1 212-908-0213
or
Committee Chairperson
Tracy Wan
Senior Director
+1 212-908-9171
or
Media Relations, New York
Sandro Scenga, +1 212-908-0278
sandro.scenga@fitchratings.com

Sharing

Contacts

Fitch Ratings
Primary Analyst
Emily Lee
Director
+1 212-908-0667
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Secondary Analyst
Charlene M. Davis
Director
+1 212-908-0213
or
Committee Chairperson
Tracy Wan
Senior Director
+1 212-908-9171
or
Media Relations, New York
Sandro Scenga, +1 212-908-0278
sandro.scenga@fitchratings.com