NEW YORK--(BUSINESS WIRE)--Fitch Ratings has affirmed the class A and B notes issued by Access Group, Inc. 2002-A Private Trust at 'Asf' and 'Bsf', respectively. The Rating Outlook remains Stable for the class A notes, and Negative for the class B notes. A complete list of rating actions follows at the end of this release. While Fitch's analysis indicated a lower rating than 'Bsf' for the class B notes, the decision to maintain the 'Bsf' rating takes into consideration its time to maturity and possibility of positive excess spread in the future with reduced defaults.
KEY RATING DRIVERS
Adequate Collateral Quality: The trust is collateralized by approximately $71.4 million of private student loans as of August 2016. The loans were originated by Access Group.
Sufficient Credit Enhancement (CE): CE is provided by overcollateralization (OC; the excess of trust's asset balance over bond balance) and excess spread. Senior and total parity ratios are currently 127.04% and 100.05%, respectively. The projected remaining defaults are expected to be 4%-6%. A recovery rate of 30% was applied which was determined to be appropriate based on data provided by the issuer.
As long as the Senior Asset Requirement parity levels of 110% and 101.5% for the senior and subordinate notes, respectively, continue not to be met, all principal payments will continue to flow to the senior A-2 notes only. Should the Senior Asset Requirement levels be met, however, principal payments can be applied to the subordinate B notes before the A-2 notes, resulting in a decline in senior parity.
Satisfactory Servicing Capabilities: Day-to-day servicing is provided by Xerox Education Services. Fitch believes the servicing operations are acceptable at this time.
Eligible Investment: Under Fitch's "Counterparty Criteria for Structured Finance and Covered Bonds", dated Sept. 1, 2016, Fitch looks to its own ratings in analyzing counterparty risk and assessing a counterparty's creditworthiness. The definition of permitted investments for this deal allows for the possibility of using investments not rated by Fitch, which represents a criteria variation. Since the only available funds to invest are monthly collections, and the funds can only be invested for a short duration of one month given the payment frequency of the notes, Fitch does not believe such variation has a measurable impact upon the current ratings assigned.
As Fitch's base case default proxy is derived primarily from historical collateral performance, actual performance may differ from the expected performance, resulting in higher loss levels than the base case. This will result in a decline in CE and remaining loss coverage levels available to the bonds and may make certain bond ratings susceptible to potential negative rating actions, depending on the extent of the decline in coverage. Fitch will continue to monitor the performance of the trust.
USE OF THIRD-PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G-10
Form ABS Due Diligence-15E was not provided to, or reviewed by, Fitch in relation to this rating action.
Fitch has affirmed the following ratings:
Access Group, Inc. 2002-A Private Trust:
--Class A-2 at 'Asf'; Outlook Stable;
--Class B at 'Bsf'; Outlook Negative.
Additional information is available at www.fitchratings.com.
Counterparty Criteria for Structured Finance and Covered Bonds (pub. 01 Sep 2016)
Criteria for Interest Rate Stresses in Structured Finance Transactions and Covered Bonds (pub. 26 Oct 2016)
Global Structured Finance Rating Criteria (pub. 27 Jun 2016)
U.S. Private Student Loan ABS Criteria (pub. 31 Jul 2015)
Dodd-Frank Rating Information Disclosure Form
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