Fitch Affirms 6 Navient Student Loan Trusts; Outlook Stable

Article

FREE Breaking News Alerts from StreetInsider.com!

StreetInsider.com Top Tickers, 8/23/2026

1. WMT
2. ROST
3. AAP
4. SPY
5. NVDA

6. BABA
7. AVGO
8. SPCX
9. DE
10. NTES

Top News Most Read Special Reports

August 10, 2015 4:27 PM EDT

E-mail

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings affirms the senior and subordinate notes at 'AAAsf' and 'AAsf', respectively, issued by Navient Student Loan Trusts 2014-2 through 2014-7. For a detailed list, see below. The Rating Outlook remains Stable on all notes.

KEY RATING DRIVERS

High Collateral Quality: The trusts' collateral consists of 100% of Federal Family Education Loan Program (FFELP) loans, of which, approximately 15% are rehabilitated loans. The credit quality of the trusts' 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 Outlook Stable.

Sufficient Credit Enhancement: While both senior and subordinate notes will benefit from future excess spread, the senior notes also benefit from subordination provided by the class B notes. As of June 2015, total parity is 104.67%, 104.38%, 104.38%, 104.26%, 104.37%, 104.37% , and senior parity is 107.78%, 107.48%, 107.48%, 107.40%, 107.49%, 107.48% for each of the above-mentioned trusts, respectively. A target overcollateralization (OC) amount equal to the greater of 4.50% of the adjusted pool balance and $2.75 million must be met before excess cash can be released from each trust.

Adequate Liquidity Support: Liquidity support is provided by a reserve account. The required reserve account balance for any distribution dates prior to Aug. 25, 2019 (the step-down date) is 2.25% of the current student loan balance; then on and after the step-down date, the greater of 0.25% of the current student loan balance or 0.10% of the initial student loan balance.

Acceptable Servicing Capabilities: Navient Solutions, Inc. (FKA Sallie Mae, Inc.), ACS, and Great Lakes are responsible for the day-to-day servicing of the student loans in the aforementioned trusts. Fitch believes all to be acceptable servicers of FFELP student loans at this time.

RATING SENSITIVITIES

Since FFELP student loan ABS 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 credit enhancement 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.

Fitch has affirmed the following ratings:

Navient Student Loan Trust 2014-2

--Class A notes 'AAAsf'; Outlook Stable;