Fitch Affirms Nelnet Education Loan Funding Series 2004-1
NEW YORK--(BUSINESS WIRE)-- Fitch Ratings affirms Nelnet Education Loan Funding series 2004-1's senior and subordinate notes at 'AAAsf' and 'AAsf', respectively. The Rating Outlooks remain Stable.
KEY RATING DRIVERS
High Collateral Quality: The trust collateral comprises 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 Outlook.
Sufficient Credit Enhancement: Credit Enhancement is provided by overcollateralization (OC; the excess of trust's asset balance over bond balance), excess spread, and for the class A notes, subordination provided by the class B notes. As of January 2015, senior and total parity are 111.08% and 101.64% respectively. The trust can release excess cash as long as a 101.00% total parity is maintained.
Adequate Liquidity Support: Liquidity support is provided by a reserve account, currently funded to its floor of $1,515,000.
Acceptable Servicing Capabilities: Nelnet Inc. as the servicer is responsible for the day-to-day servicing of this trust. In Fitch's opinion, Nelnet is an acceptable servicer of FFELP student loans.
RATING SENSITIVITIES
Since the FFELP student loan ABS 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 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:
Nelnet Education Loan Funding 2004-1:
--Class A-2 at 'AAAsf'; Outlook Stable;
--Class B-1 at 'AAsf'; Outlook Stable;
--Class B-2 at 'AAsf'; Outlook Stable.
Additional information is available at 'www.fitchratings.com'.
Applicable Criteria and Related Research:
--'Global Structured Finance Rating Criteria' (March 31, 2015);
--'Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria' (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=982338
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Fitch Ratings
Primary Analyst:
Harry Kohl, +1-212-908-0837
Associate
Director
Fitch Ratings, Inc.
33 Whitehall Street
New
York, NY 10004
or
Committee Chairperson:
Tracy Wan,
+1-212-908-9171
Senior Director
or
Sandro Scenga,
+1-212-908-0278
Media Relations, New York
[email protected]
Source: Fitch Ratings
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