Fitch Takes Various Rating Actions on Goal Capital Funding Trust 2007-1

NEW YORK--()--Fitch Ratings takes various rating actions on the following senior, subordinate and junior subordinate notes issued by Goal Capital Funding Trust Series 2007-1:

--Senior class A-3 notes affirmed at 'AAAsf'; Outlook Stable;

--Senior class A-4 notes 'AAAsf', remains on Rating Watch Negative;

--Senior class A-5 notes 'AAAsf', placed on Rating Watch Negative;

--Subordinate class B-1 'AA+sf', remains on Rating Watch Negative;

--Junior subordinate class C-1 notes affirmed at 'BBBsf'; Outlook Stable.

KEY RATING DRIVERS

The Rating Watch Negative action on class A-5 notes is due to their inability to pass 'AAA' credit stresses. In addition, the Rating Watch Negative is maintained on class A-4 notes due to the heightened risk of the class A-4 notes missing their legal final maturity date of March 25, 2036, which would result in an event of default. In an event of such technical default, Fitch would expect ultimate repayment of full principal and interest after the legal final. Fitch expects to resolve the Rating Watch Negative status once its revised FFELP criteria report is published.

Collateral Quality: The 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. Fitch currently rates the U.S. sovereign 'AAA' with a Stable Outlook.

Credit Enhancement: Both the senior and subordinate notes will benefit from the credit enhancement provided by overcollateralization (OC) or the excess of the trust's asset balance over bond balance, and the senior class A notes and subordinate class B-1 notes will also benefit from subordination provided by the class C-1 notes. As of the last distribution date in February 2016, total parity is 100.61%, subordinate parity is 101.27% and senior parity is 107.11%. Currently, no cash is being released from the trust. After the class C notes have been paid in full from excess cash available, cash may then be released from the trust to the certificate holders after the trust's cash release requirements have been satisfied.

Adequate Liquidity Support: Liquidity support is provided by a Debt Service Reserve Fund sized at the greater of 0.25% of the current pool balance and 0.15% of the initial pool balance. As of February 2016, the debt service reserve fund is sized at $1,648,140.

Servicing Capabilities: Day-to-day servicing will be provided by American Education Services (AES), a servicing division of the Pennsylvania Higher Education Assistance Agency (PHEAA), and Xerox-ES, formerly ACS Education Services, Inc. Fitch deems each of these servicers to have satisfactory servicing operations at this time.

On Nov. 18, 2015, Fitch released its exposure draft which delineates revisions it plans to make to the 'Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria', dated June 23, 2014.

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, basis risk, and loan extension risk account for the majority of the risk embedded in FFELP student loan transactions. Additional defaults, basis shock beyond Fitch's published stresses, lower than expected payment speed, and other factors could result in future downgrades. Likewise, a build-up of CE driven by positive excess spread given favorable basis factor conditions could lead to future upgrades.

DUE DILIGENCE USAGE

No third-party due diligence was provided or reviewed in relation to this rating action.

Additional information is available at www.fitchratings.com.

Applicable Criteria

Counterparty Criteria for Structured Finance and Covered Bonds (pub. 14 May 2014)
https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=744158

Criteria for Interest Rate Stresses in Structured Finance Transactions and Covered Bonds (pub. 19 Dec 2014)
https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=838868

Exposure Draft: Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria (pub. 04 Dec 2015)
https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=874971

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=1004119

Solicitation Status
https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=1004119

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

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Contacts

Fitch Ratings
Primary Analyst
Jeffrey Prackup, +1-212-908-0839
Director
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Committee Chairperson
Tracy Wan, +1-212-908-9171
Senior Director
or
Media Relations, New York
Sandro Scenga, +1-212-908-0278
sandro.scenga@fitchratings.com

Contacts

Fitch Ratings
Primary Analyst
Jeffrey Prackup, +1-212-908-0839
Director
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Committee Chairperson
Tracy Wan, +1-212-908-9171
Senior Director
or
Media Relations, New York
Sandro Scenga, +1-212-908-0278
sandro.scenga@fitchratings.com