NEW YORK--(BUSINESS WIRE)--Fitch Ratings has affirmed the Higher Education Loan Authority of the State of Missouri (MOHELA) 2010-1 note at 'AAAsf'. The Rating Outlook remains Stable.
KEY RATING DRIVERS
High Collateral Quality: The trust collateral consists of 100% of Federal Family Education Loan Program (FFELP) loans. The credit quality of the trust collateral is high, in Fitch's opinion, 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. The current U.S. sovereign rating is at 'AAA' with a Stable Outlook.
Sufficient Credit Enhancement (CE): The class A bond will benefit from overcollateralization and future excess spread. As of July 2015, total parity is 110% (9.09% CE). Cash is being released from the trust given that the 110% total parity is maintained.
Adequate Liquidity Support: Liquidity support is provided by a reserve account. The reserve is sized equal to the greater of 0.25% of the pool balance, and $1,191,568.
Acceptable Servicing Capabilities: Day-to-day servicing will be provided by MOHELA. Pennsylvania Higher Education Assistance Agency (PHEAA) will also act as backup servicer for the entire pool. MOHELA and PHEAA have demonstrated adequate servicing capabilities for FFELP student loans.
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 build-up of credit enhancement driven by positive excess spread given favorable basis factor conditions could lead to future upgrades.
DUE DILIGENCE USAGE
Fitch was not provided due diligence information from any third parties relating to the Higher Education Loan Authority of the State of Missouri 2010-1.
Fitch has affirmed the following rating:
Higher Education Loan Authority of the State of Missouri Series 2010-1
--Class A at 'AAAsf'; Outlook Stable.
Additional information is available at www.fitchratings.com.
Global Structured Finance Rating Criteria (pub. 06 Jul 2015)
Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria (pub. 23 Jun 2014)
Dodd-Frank Rating Information Disclosure Form