[January 29, 2015]

Fitch Affirms Ratings on SLC Private Student Loan Trust, Series 2006-A

Fitch Ratings has affirmed the ratings on the Student Loan Corporation (SLC) Private Student Loan Trust Series 2006-A notes issued by SLC. The Rating Outlook for the senior class A and subordinate class B notes remains Stable, and the junior subordinate class C notes have been revised to Outlook Stable from Negative.

A detailed list of rating actions follows at the end of this press release. Fitch's Global Structured Finance Rating Criteria; Private Student Loan Asset-Backed Securities (ABS (News - Alert)) Criteria; and Counterparty Criteria for Structured Finance and Covered Bonds were used to review the transaction.

Collateral Quality:

The trust collateral consists of approximately $878 million of private student loans originated under Citibank's CitiAssist private student loan program and underwritten to specific guidelines. The projected remaining defaults ranges between 9% and 12%.

The trust benefits from third party insurance provided by New Hampshire Insurance Company (NHIC) for approximately 57% of the portfolio and Royal & Sun Alliance USA (RSA (News - Alert)) for 38% of the portfolio. Recovery is estimated to be 40-85% in different rating stress scenarios, as Fitch differentiates credit given to insurance coverage based on insurer's financial strength.

Credit Enhancement (CE):

CE is provided by overcollateralization (OC); the excess of the trust's asset balance over the bond balance) and excess spread. The total parity ratio (total assets over total liabilities) has been increasing and is currently 101.77% as of December 2014. The senior notes also benefit from the subordination of the Class B and Class C notes. Senior parity has been rising and is 169.15%, and the subordinate parity has risen as well to 135.31%.

The SLC 2006-A trust's credit enhancement levels are sufficient to maintain the current ratings on the outstanding notes.

Liquidity Support:

Liquidity support will be provided by a debt service reserve fund which is equal to the greater of 0.25% of the original pool balance and 1.00% of the pool balance of the last day of related collection period.

Servicing Capabilities:

SLC / Discover Bank is the master servicer and administrator of the trust, and the subservicer, Discover Products Inc. is a wholly owned subsidiary of Discover Bank. Fitch believes the servicing operation of Discover Products Inc. to be acceptable at this time.

Rating Sensitivities:

As Fitch's base case default proxy is derived primarily from hitorical 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 affirms its ratings on the following notes:

SLC Private Student Loan Trust 2006-A

--Senior Class A-5 at 'AAAsf'; Outlook Stable;

--Subordinate Class B at 'AAsf'; Outlook Stable;

--Junior Subordinate Class C at 'Asf'; Outlook Stable from Negative.

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

Applicable Criteria and Related Research:

--'U.S. Private Student Loan ABS Criteria', Jan. 29, 2014;

--'Global Structured Finance Rating Criteria', May 24, 2013;

--'Counterparty Criteria for Structured Finance and Covered Bonds' May 14, 2014.

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=754389

Counterparty Criteria for Structured Finance and Covered Bonds

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=744158

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=978872

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.

[ Back To TMCnet.com's Homepage ]