Fitch Affirms KeyCorp Student Loan Trust 1999-A Senior Notes; Upgrades Sub Notes

NEW YORK--()--Fitch Ratings affirms KeyCorp Student Loan Trust 1999-A senior notes at 'AAAsf' and upgrades the subordinate notes to 'A+sf' from 'Asf'. The Rating Outlook for both tranches remains Stable.

KEY RATING DRIVERS

High Collateral Quality: The trust is collateralized by approximately $70.98 million of student loans (57.57% FFELP and 42.43% Private) as of February 2014. The credit quality of the FFELP portion is high, in Fitch's opinions, based on the guarantees provided by the U.S. Department of Education (ED) for at least 97% of principal and accrued interest. Fitch affirmed and assigned a Stable Rating Outlook to the U.S. sovereign rating on March 24, 2014. The projected remaining defaults on the private student loans range between 5% - 7% as of the current principal balance based on data provided by KeyCorp. A recovery rate of 15% was applied.

Sufficient Credit Enhancement (CE): CE is provided by overcollateralization (the excess of trust's asset balance over bond balance) and excess spread. The Class A notes benefits from subordination provided by the Class B notes. As of February 2014, senior and total parity ratio is at 250.51% and 113.96%, respectively. Cash is not released from this trust as all collections are used to pay down the outstanding notes.

Adequate Liquidity Support: is provided by a reserve account sized at the greater of 0.30% of the aggregate outstanding principal amount of the notes and certificates and $1,297,500.

Satisfactory Servicing Capabilities: KeyBank, N.A. serves as the Master Servicer for the trust, Fitch deems the servicing operations 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 has taken the following actions:

KeyCorp Student Loan Trust 1999-A:

--Class A-2 notes affirmed at 'AAAsf'; Outlook Stable;

--Class B notes upgraded to 'A+sf' from '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 20, 2014).

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=748821

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=831190

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Contacts

Fitch Ratings
Primary Analyst
Charlene M. Davis
Director
+1 212-908-0213
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Committee Chairperson
Michael Dean
Managing Director
+1 212-908-0556
or
Media Relations, New York
Sandro Scenga, +1 212-908-0278
sandro.scenga@fitchratings.com

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Contacts

Fitch Ratings
Primary Analyst
Charlene M. Davis
Director
+1 212-908-0213
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Committee Chairperson
Michael Dean
Managing Director
+1 212-908-0556
or
Media Relations, New York
Sandro Scenga, +1 212-908-0278
sandro.scenga@fitchratings.com