NEW YORK--(BUSINESS WIRE)--Fitch Ratings has affirmed the senior student loan notes issued by Montana Higher Education Assistance Corp, 1993 Master Trust. The Rating Outlook on the notes, which is tied to the sovereign rating of the U.S. government, remains Negative. Fitch used its 'Global Structured Finance Rating Criteria', and 'Rating U.S. Federal Family Education Loan Program Student Loan ABS' to review the ratings.
Key Rating Drivers
The ratings on the senior notes are affirmed based on the sufficient level of credit enhancement to cover the applicable risk factor stresses. Credit enhancement for the senior notes consists of overcollateralization, subordination, and projected minimum excess spread. Current reported senior parity is 104.08%. Excess cash may not be released from the trust until all bonds are paid in full.
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 buildup of credit enhancement driven by positive excess spread given favorable basis factor conditions could lead to future upgrades.
Fitch has taken the following rating actions:
Fitch Affirms Montana Higher Ed Student Assistance Corp, 1993 Master Trust:
--2005-B affirmed at 'AAAsf'; Outlook Negative;
--2006-A affirmed at 'AAAsf'; Outlook Negative;
--2012 A-1 affirmed at 'AAAsf'; Outlook Negative;
--2012 A-2 affirmed at 'AAAsf'; Outlook Negative;
--2012 A-3 affirmed at 'AAAsf'; Outlook Negative.
Additional information is available at 'www.fitchratings.com'. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.
Applicable Criteria and Related Research:
--'Global Structured Finance Rating Criteria' dated June 6, 2012;
--'Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria' dated April 1, 2013.
--'Montana Higher Education Student Assistance Corporation Senior Series 2012-A', dated May 1, 2012.
A comparison of the transaction's RW&Es to those of typical RW&Es for student loans is available by accessing the reports and links below:
--'Montana Higher Education Student Assistance Corporation Senior Series 2012-A -- Appendix', dated May 1, 2012
--'Representations, Warranties, and Enforcement Mechanisms in Global Structured Finance Transactions -- Amended', dated April 17, 2012.
Applicable Criteria and Related Research
Montana Higher Education Student Assistance Corporation Senior Series 2012-A -- Appendix
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=678372
Montana Higher Education Student Assistance Corporation Senior Series 2012-A
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=678211
Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=704322
Global Structured Finance Rating Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=679923
Representations, Warranties, and Enforcement Mechanisms in Global Structured Finance Transactions -- Amended
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=676496
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