NEW YORK--(BUSINESS WIRE)--Fitch Ratings affirms the senior and subordinate notes issued from Nelnet Student Loan Trust 2013-1 at 'AAAsf' and 'AAsf', respectively. The Rating Outlook on all outstanding notes remains Stable.
KEY RATING DRIVERS
High Collateral Quality: The trust collateral consists of 100% 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's current U.S. sovereign rating is 'AAA' with a Stable Outlook.
Sufficient Credit Enhancement (CE): Transaction CE is provided by overcollateralization (OC) and excess spread. In addition, the class A notes benefit from subordination from the class B notes. As of the October 2015 distribution report, senior and total parity are at 105.34% and 102.04%, respectively. The trust has been releasing cash as the specified OC amount that requires the greater of 2.0% of the adjusted pool balance and $2,000,000 has been met.
Adequate Liquidity Support: Liquidity support is provided by a reserve account (greater of 0.50% of outstanding notes or $437,500 floor).
Acceptable Servicing Capabilities: National Education Loan Network, Inc. is the master servicer. Xerox Education Services, Tru Student, Inc., Great Lake Educational Loan Services, Inc. and Pennsylvania Higher Education Assistance Agency are the sub-servicers of this trust. In Fitch's opinion, all the servicers are acceptable servicers of FFELP student loans.
Since 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 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
No third-party due diligence was provided or reviewed in relation to this rating action.
Fitch has affirmed the following ratings:
Nelnet Student Loan Trust 2013-1:
--Class A notes at 'AAAsf'; Outlook Stable;
--Class B notes at 'AAsf'; Outlook Stable.
Additional information is available at www.fitchratings.com.
Counterparty Criteria for Structured Finance and Covered Bonds (pub. 14 May 2014)
Criteria for Interest Rate Stresses in Structured Finance Transactions and Covered Bonds (pub. 19 Dec 2014)
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