Fitch Affirms Montana Higher Ed Student Assistance Corp, 1993 Master Trust

NEW YORK--()--Fitch Ratings has affirmed the senior student loan notes issued by Montana Higher Education Assistance Corp, 1993 Master Trust. The Rating Outlook for the notes, which is tied to the sovereign rating of the U.S. government, is Stable.

KEY RATING DRIVERS

High Collateral Quality: The trust collateral comprises 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 currently rates the U.S. 'AAA' with a Stable Outlook.

Sufficient Credit Enhancement: CE is provided by overcollateralization (OC; the excess of trust's asset balance over bond balance) and excess spread. As of January 2015, parity is at 105.77%. Additionally, the trust is in turbo and no cash will be released until all notes have been paid in full.

Adequate Liquidity Support: Liquidity support is provided by a Debt Service Reserve Fund currently sized at $10,687,990 (1% of the bond balance, with a floor of $7,343,420)

Acceptable Servicing Capabilities: Day-to-day servicing will be provided by SAF (with PHEAA acting as back-up servicer). Both servicers have demonstrated adequate servicing capabilities.

Rating Sensitivities

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 CE driven by positive excess spread given favorable basis factor conditions could lead to future upgrades.

Fitch has affirmed the following:

Montana Higher Ed Student Assistance Corp, 1993 Master Trust:

--2005-B at 'AAAsf'; Outlook Stable;

--2006-A at 'AAAsf'; Outlook Stable;

--2012 A-2 at 'AAAsf'; Outlook Stable;

--2012 A-3 at 'AAAsf'; 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).

--'Montana Higher Education Student Assistance Corporation Senior Series 2012-A' (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:

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

Montana Higher Education Student Assistance Corporation Senior Series 2012-A
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=678211

Additional Disclosure

Solicitation Status
http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=981161

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Contacts

Fitch Ratings
Primary Analyst
Victoria Ohorodnyk, +1-212-908-0866
Associate 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
Victoria Ohorodnyk, +1-212-908-0866
Associate 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