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Fitch Affirms Iowa Student Loan Liquidity Corporation 2005-1 NotesFitch Ratings has affirmed the following Iowa Student Loan Liquidity Corporation (Iowa Student Loans) Student Loan Asset-Backed Notes Series 2005-1: --Class A-3 at 'AAAsf'; Outlook Stable; --Class B at 'A+sf'; Outlook Stable. KEY RATING DRIVERS High Collateral Quality: The trust collateral is comprised of Federal Family Education Loan Program (FFELP) loans with guaranties provided by eligible guarantors and reinsurance provided by the U.S. Department of Education (ED) for at least 97% of principal and accrued interest. Fitch's current U.S. sovereign rating is 'AAA' with a Stable Rating Outlook. Sufficient Credit Enhancement: While both the senior and subordinate notes will benefit from overcollateralization (OC; the excess of trust's asset balance over bond balance) and excess spread, the senior notes also benefit from subordination provided by the class B notes. As of September 2015, total parity is 101.54% (1.54% CE), and senior parity is 118.40% (15.54% CE). Although the total parity is 101.54%, Fitch only gives credit to the 100.50% cash release level. Adequate Liquidity Support: Liquidity support is provided by a reserve account which is determined as the greater of 0.50% of the note balance and $1,014,938. The reserve account is currently sized at $1,015,002. Acceptable Servicing Capabilities: Iowa Student Loans' subsidiary, Aspire Resources, Inc., performs day-to-day servicing of the trust. Fitch believes Aspire Resources, Inc. to be an acceptable servicer of FFELP student loans. RATING SENSITIVITIES Since the FFELP student loan ABS (News - Alert) relies 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, basis risk, and loan extension risk account for the majority of the risk embedded in FFELP student loan transactions. Additional defaults, basis shock beyond Fitch's published stresses, lower than expected payment speed, and other factors could result in future downgrades. Likewise, a build-up of CE driven by positive excess spread given favorable basis factor conditions could lead to future upgrades. DUE DILIGENCE USAGE No third party due diligence was provided or reviewed in relation to this rating action. Additional information is available at www.fitchratings.com. Applicable Criteria Counterparty Criteria for Structured Finance and Covered Bonds (pub. 14 May 2014) https://www.fitchratings.com/creditdeskreports/report_frame.cfm?rpt_id=744158 Counterparty Criteria for Structured Finance and Covered Bonds: Derivative Addendum (pub. 14 May 2014) https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=744175 Criteria for Interest Rate Stresses in Structured Finance Transactions and Covered Bonds (pub. 19 Dec 2014) https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=838868 Exposure Draft: Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria (pub. 04 Dec 2015) https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=874971 Global Structured Finance Rating Criteria (pub. 06 Jul 2015) https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=867952 Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria (pub. 23 Jun 2014) https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=750530 Additional Disclosures Dodd-Frank Rating Information Disclosure Form https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=998261 Solicitation Status https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=998261 Endorsement Policy https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31 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. View source version on businesswire.com: http://www.businesswire.com/news/home/20160122005910/en/ |