NEW YORK?(BUSINESS WIRE)?
Fitch Ratings affirms the ratings of Massachusetts Educational Financing Authority?s (MEFA) Amended and Restated 2001 General Bond Resolution Educational Loan Revenue Bonds, Issue E which are backed by collateral comprised of nearly all private student loans and less than 1% Federal Family Education Loan Program (FFELP) Student Loan Notes. The Rating Outlook remains Negative. Fitch?s ?U.S. Private SL ABS Criteria? and ?Global Structured Finance Rating Criteria? were used to review the ratings. The rating actions are detailed at the end of this press release.
The affirmation is based on loss coverage multiples commensurate with the notes currently assigned ratings and are based on the review of the collateral performance data as of September 2011. Loss coverage multiples were determined by comparing the projected net loss amount to available credit enhancement. Fitch used historical vintage loss data provided by MEFA to form a loss timing curve representative of collateral pool. After giving credit for seasoning of loans in repayment, Fitch applied the current cumulative gross loss level to the loss timing curve to derive the expected gross losses over the remaining life. A recovery rate was applied, which was determined to be appropriate based on the latest data provided by the issuer. The Negative Outlooks are assigned to all ratings in line with Fitch?s negative view of the private student loan sector in general.
Credit enhancement consists of excess spread and overcollateralization. Fitch assumed excess spread to be the weighted average coupon on the loans less trust expenses and the maximum interest rate on the notes.
Although the notes are insured by AMBAC Assurance Corp. (Ambac), Fitch does not give credit to the insurance, as Fitch does not provide a rating for Ambac. The rating on the bonds is therefore based upon the collateral performance. After funds have been disbursed to satisfy the requirements under the flow of funds as stated in the General Resolution, the trust may release cash to the issuer if parity is greater than 103% and Ambac has approved of such a cash release. Currently, parity is reported to be 104.88%.
The trust?s parity has declined over the past year to 104.88% from 105.97%; however, the decline is not performance related and is primarily due to a reduction in assets as MEFA has made adjustments to comply with yield restriction requirements for tax-exempt bonds. These adjustments are not expected to be maintained at this level going forward, and an assessment of the yield will be reviewed periodically to determine if any future adjustments or rebates will be necessary.
Fitch affirms the following ratings:
Massachusetts Educational Financing Authority?s Amended and Restated 2001 General Bond Resolution Educational Loan Revenue Bonds, Issue E:
?Series 2001A at ?AAsf?; Outlook Negative.
?Series 2002A at ?AAsf?; Outlook Negative;
?Series 2002B at ?AAsf?; Outlook Negative;
?Series 2002D at ?AAsf?; Outlook Negative;
?Series 2002E at ?AAsf?; Outlook Negative.
?Series 2003A at ?AAsf?; Outlook Negative;
?Series 2003B at ?AAsf?; Outlook Negative;
?Series 2003E at ?AAsf?; Outlook Negative.
?Series 2004A at ?AAsf?; Outlook Negative;
?Series 2004B at ?AAsf?; Outlook Negative.
?Series 2005A at ?AAsf?; Outlook Negative;
?Series 2005B at ?AAsf?; Outlook Negative.
?Series 2006A-1 at ?AAsf?; Outlook Negative;
?Series 2006A-2 at ?AAsf?; Outlook Negative;
?Series 2006C at ?AAsf?; Outlook Negative;
?Series 2006D at ?AAsf?; Outlook Negative.
?Series 2007A-1 at ?AAsf?; Outlook Negative;
?Series 2007A-2 at ?AAsf?; Outlook Negative;
?Series 2007A-3 at ?AAsf?; Outlook Negative;
?Series 2007B at ?AAsf?; Outlook Negative;
?Series 2007C at ?AAsf?; Outlook Negative;
?Series 2007D at ?AAsf?; Outlook Negative;
?Series 2007E at ?AAsf?; 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 Aug. 4, 2011;
??U.S. Private Student Loan ABS Criteria? dated July 19, 2011;
??Rating U.S. Federal Family Education Loan Program Student Loan ABS? dated April 7, 2011;
??U.S. FFELP Student Loan ABS Surveillance Criteria? dated May 10, 2011.
Applicable Criteria and Related Research:
Global Structured Finance Rating Criteria
U.S. Private Student Loan ABS Criteria
Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria
U.S. FFELP Student Loan ABS Surveillance Criteria
ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: . IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY?S PUBLIC WEBSITE ? WWW.FITCHRATINGS.COM ?. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH?S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE ?CODE OF CONDUCT? SECTION OF THIS SITE.
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