Fitch Takes Various Actions on Access to Loans for Learning Student Loan Corp - 1998 Master Trust IV

NEW YORK--()--Fitch Ratings has upgraded the Access to Loans for Learning Student Loan Corp - 1998 Master Trust IV (ALL SLC 1998) senior note (IV-A-13) to 'AAAsf' from 'BBBsf' with a Stable Outlook. Fitch has also affirmed the remaining senior notes (IV-A) and senior subordinate notes (IV-C) at 'B-sf' with Stable Outlooks.

The upgrade of the senior (IV-A13) note is due to the expected payoff of the LIBOR floating notes under Fitch's rating stress scenarios before its legal maturity date. The structure prioritizes principal payment of LIBOR floating notes based on a targeted amortization schedule over principal payment of other auction rate securities.

KEY RATING DRIVERS

High Collateral Quality: The trust collateral is comprised 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 'AAA' with a Stable Outlook.

Sufficient Credit Enhancement: CE is provided by overcollateralization and excess spread. As of June 2015, reported senior is 107.88%, senior-subordinate is 102.78% and total parity is 100.73%, respectively. Cash can be released from the trust provided the senior parity is at least 110%; senior-subordinate parity is at least 106%, and total parity is at least 102%.

Adequate Liquidity Support: Liquidity support is provided by a reserve account which is determined as the greater of 0.75% of the principal amount of bonds outstanding or $1,000,000.

Acceptable Servicing Capabilities: Day to day servicing is provided by Navient Solutions, Great Lakes Educational Services Inc. and ACS. In Fitch's opinion, all servicer are acceptable servicers of student loans.

RATING SENSITIVITIES

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 ALL SLC 1998.

Fitch has taken the following rating actions:

Access to Loans for Learning Student Loan Corp - 1998 Master Trust IV

Senior Class Notes

--Series 2003-1 class A-8 affirmed at 'B-sf'; Outlook Stable;

--Series 2003-1 class A-10 affirmed at 'B-sf'; Outlook Stable;

--Series 2003-2 class A-11 affirmed at 'B-sf'; Outlook Stable;

--Series 2004 class A-13 upgraded to 'AAAsf' from 'BBBsf'; Outlook to Stable from Positive;

--Series 2007 class A-14 affirmed at 'B-sf'; Outlook Stable;

--Series 2007 class A-15 affirmed at 'B-sf'; Outlook Stable;

--Series 2007 class A-16 affirmed at 'B-sf'; Outlook Stable;

--Series 2007 class A-17 affirmed at 'B-sf'; Outlook Stable;

--Series 2007 class A-18 affirmed at 'B-sf'; Outlook Stable.

Subordinate Class Note

--Series 1998 class C-1 affirmed at 'B-sf'; Outlook Stable.

Additional information is available at www.fitchratings.com.

Applicable Criteria

Global Structured Finance Rating Criteria (pub. 06 Jul 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=867952

Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria (pub. 23 Jun 2014)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=750530

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=990409

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=990409

Endorsement Policy

https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31

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Contacts

Fitch Ratings
Primary Analyst
Paul Jiang
Associate Director
+1-212-908-9120
Fitch Ratings, Inc.
33 Whitehall St.
New York, NY 10004
or
Committee Chairperson
Tracy Wan
Senior Director
+1-212-908-9171
or
Media Relations
Sandro Scenga, +1 212-908-0278
sandro.scenga@fitchratings.com

Contacts

Fitch Ratings
Primary Analyst
Paul Jiang
Associate Director
+1-212-908-9120
Fitch Ratings, Inc.
33 Whitehall St.
New York, NY 10004
or
Committee Chairperson
Tracy Wan
Senior Director
+1-212-908-9171
or
Media Relations
Sandro Scenga, +1 212-908-0278
sandro.scenga@fitchratings.com