[May 06, 2014]

Fitch Affirms Massachusetts Educational Finance Authority Issue I; Outlook Revised to Stable

Fitch Ratings has affirmed the ratings for the student loan revenue bonds issued by Massachusetts Educational Financing Authority (MEFA), Issue I series 2009 and 2010 at 'Asf'. The Rating Outlook has been revised to Stable from Negative. A detailed list of rating actions follows at the end of this press release.

KEY RATING DRIVERS

Adequate Collateral Quality: The trust is collateralized by approximately $484 million of private student loans as of December 2013. The loans were originated under MEFA's Fixed Rate Loan Program. Fitch projected remaining defaults to range between 6 - 8% as of the current principal balance based on data provided by MEFA. A recovery rate of 30% was applied which was determined to be appropriate based on data provided by the issuer.

Sufficient Credit Enhancement (CE): CE is provided by overcollateralization (the excess of trust's asset balance over bond balance) and excess spread. The total parity ratio is currently 108.97%. The trust is not releasing any excess cash as it has not reached its release parity threshold of 112%

Sufficient Liquidity Support: Liquidity support is provided by a $10.2 million debt service reserve fund.

Satisfactory Servicing Capabilities: Day-to-day servicing is provided by ACS (News - Alert) Education Services. Fitch believes the servicing operations are acceptable at this time.

RATING SENSITIVITIES

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 notes and may make certain note 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.

Fitch affirms the following ratings and revises the Outlook to Stable from Negative:

Massachusetts Educational Financing Authority (MEFA) Education Loan Revenue Bonds, Issue I series 2009 and series 2010:

--Series 2009 1/1/2014 at 'Asf';

--Series 2009 1/1/2015 at 'Asf';

--Series 2009 5.25 % due 1/1/2015 at 'Asf';

--Series 2009 1/1/2016 at 'Asf';

--Series 2009 5.25 % due 1/1/2016 at 'Asf';

--Series 209 1/1/2017 at 'Asf';

--Series 2009 1/1/2018 at 'Asf';

--Series 2009 5.50 % due 1/1/2018 at 'Asf';

--Series 2009 1/1/2019 at 'Asf';

--Series 2009 5.50 % due 1/1/2019 at 'Asf';

--Series 2009 1/1/2020 at 'Asf';

--Series 2009 5.75 % due 1/1/2020 at 'Asf';

--Term Bond 2009 5.75 % due 1/1/2023 at 'Asf';

--Term Bond 2009 6.00 % due 1/1/2028 at 'Asf';

MEFA, Issue I series 2010

--Series 2010A 1/1/2014 at 'Asf';

--Series 2010A 1/1/2015 at 'Asf';

--Series 2010A 1/1/2016 at 'Asf';

--Series 2010A 1/1/2017 at 'Asf';

--Series 2010A 1/1/2018 at 'Asf';

--Series 2010A 1/1/2019 at 'Asf';

--Series 2010A 1/1/2020 at 'Asf';

--Series 2010A 1/1/2021 at 'Asf';

--Series 2010A 1/1/2022 at 'Asf';

--Series 2010A 1/1/2025 at 'Asf';

--Series 2010A 1/1/2026 at 'Asf';

--Series 2010A 1/1/2027 at 'Asf';

--Series 2010A 1/1/2028 at 'Asf';

--Series 2010A 1/1/2029 at 'Asf';

--Series 2010A 1/1/2030 at 'Asf';

--Series 2010B 1/1/2014 at 'Asf';

--Series 2010B 1/1/2015 at 'Asf';

--Series 2010B 1/1/2016 at 'Asf';

--Series 2010B 1/1/2017 at 'Asf';

--Series 2010B 1/1/2018 at 'Asf';

--Series 2010B 1/1/2019 at 'Asf';

--Series 2010B 1/1/2020 at 'Asf';

--Term Bond 1/1/2023 at 'Asf';

--Term Bond 1/1/2031 at 'Asf'.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research:

--'U.S. Private Student Loan ABS (News - Alert) Criteria' (Jan. 29, 2014);

--'Global Structured Finance Rating Criteria' (May 24, 2013).

Applicable Criteria and Related Research:

U.S. Private Student Loan ABS Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=730956

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=708661

Additional Disclosure

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON (News - Alert) 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. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

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