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Fitch Affirms SLC 2006-1Fitch Ratings affirms the ratings of the class A and class B notes issued by SLC Student Loan Trust 2006-1 at their current ratings. The Rating Outlook is Stable for all notes. KEY RATING DRIVERS High Collateral Quality: The trust collateral consists of 100% of 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 currently rates the U.S. sovereign 'AAA', Outlook Stable. Sufficient Credit Enhancement (CE): CE is provided by excess spread and for the senior notes, subordination provided by the class B note. As of the September 2014 distribution, total parity is at the excess release level of 100% and senior parity is 104.95%. The trust is currently releasing excess cash. Adequate Liquidity Support: Liquidity support is provided by a reserve account sized at $3,312,780. Acceptable Servicing Capabilities: Navient Solutions LLC. (Navient), as servicer, is responsible for servicing the loans in the trust. Fitch believes Navient is an acceptable servicer of FFELP student loans. RATING SENSITIVITIES Since FFELP student loan ABS (News - Alert) 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: SLC Student Loan Trust Series 2006-1: -- Class A-4 at 'AAAsf'; Outlook Stabe; -- Class A-5 at 'AAAsf'; Outlook Stable; -- Class A-6 at 'AAAsf'; Outlook Stable; -- Class B at 'Asf'; Outlook Stable. Additional information is available at 'www.fitchratings.com'. Applicable Criteria and Related Research: --'Global Structured Finance Rating Criteria' dated August 2014; --'Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria' dated June 2014. 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 Additional Disclosure Solicitation Status http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=964135 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. |
