NEW YORK--(BUSINESS WIRE)--Fitch Ratings has affirmed the KeyCorp Student Loan Trust 2006-A (Group I) senior and subordinate notes at 'AAAsf' and 'A+sf', respectively. The Rating Outlook remains Stable.
KEY RATING DRIVERS
High Collateral Quality: The trust collateral is comprised 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's current U.S. sovereign rating is 'AAA' with a Stable Rating Outlook.
Sufficient Credit Enhancement: CE is provided by overcollateralization (OC; the excess of trust's asset balance over bond balance), excess spread, and for the class A notes, subordination provided by the class B notes. As of November 2014, total parity is 100.25%, the release level, and senior parity is 105.43%. The parity ratios are expected to stay at this level, as the trust is past the stepdown date, and should continue to release cash.
Adequate Liquidity Support: Liquidity support is provided by a reserve account which is determined as the greater of 0.25% of the pool balance and $345,001. It is currently sized at the floor of $345,001.
Acceptable Servicing Capabilities: KeyBank National Association is the Master Servicer for the transaction, with Pennsylvania Higher Education Assistance Agency and Great Lakes Educational Loan Services, Inc. acting as Subservicers. Fitch believes KeyBank National Association, Pennsylvania Higher Education Assistance Agency, and Great Lakes Educational Loan Services, Inc. to be acceptable servicers of FFELP student loans.
RATING SENSITIVITIES
Since the FFELP student loan ABS relies 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 affirmed the following ratings:
KeyCorp Student Loan Trust 2006-A (Group I):
--Class A-2 at 'AAAsf'; Outlook Stable;
--Class B at 'A+sf'; Outlook Stable.
Additional information is available at 'www.fitchratings.com'.
Applicable Criteria and Related Research:
--'Global Structured Finance Rating Criteria' (Aug. 4, 2014);
--'Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria' (June 23, 2014).
Applicable Criteria and Related Research:
Global Structured Finance Rating Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=754389
Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=750530
Additional Disclosure
Solicitation Status
http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=978599
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