TMCnet News
Fitch Affirms Senior Notes of Scholar Funding Trust 2011-B and 2010-AFitch Ratings affirms the senior student loan notes at 'AAAsf' issued by Scholar Funding Trust 2011-B and Scholar Funding Trust 2010-A. The Rating Outlook on the notes, which is tied to the sovereign rating of the U.S. government, is Stable. Key Rating Drivers High Collateral Quality: The collateral consists of 100% rehab 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. 'AAA' with a Stable Outlook. Sufficient Credit Enhancement (CE): CE is provided by overcollateralization (OC; the excess of trust's asset balance over bond balance) and excess spread. As of the April 2014 servicer report, total parity was 106.38% for both Scholar Funding Trust 2011-B and Scholar Funding Trust 2010-A, which is both trusts' release level. Adequate Liquidity Support: Liquidity support is provided by a reserve fund sized at 0.25% of the bond balance, with a floor of $500,000, for both trusts. Acceptable Servicing Capabilities: JP Morgan (News - Alert) Chase Bank N.A. is the master servicer of both trusts, with Xerox-ES acting as sub-servicer. Fitch believes both servicers to be acceptable servicers of FFELP student loans. Rating Sensitivities Since FFELP student loan ABS (News - Alert) rely on the U.S. government to reimburse defaults, 'AAA'sf 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 credit enhancement driven by positive excess spread given favorable basis factor conditions could lead to future upgrades. Fitch hastaken the following rating actions: Scholar Funding Trust 2011-B: --Class A affirmed at 'AAAsf'; Outlook Stable. Scholar Funding Trust 2010-A: --Class A affirmed at 'AAAsf'; Outlook Stable. Additional information is available at 'www.fitchratings.com' Applicable Criteria and Related Research: --'Global Structured Finance Rating Criteria' dated August 4, 2014; --'Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria' dated June 23, 2014. Applicable Criteria and Related Research: Global Structured Finance Rating Criteria http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=864268 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=984671 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. |
