Fitch Affirms Access Group Inc., Series 2005-1

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings has affirmed the ratings of the Access Group Inc., Series 2005-1 as follows:

--Class A-3 at 'AAAsf'; Outlook Stable;

--Class A-4 at 'AAAsf'; removed from Rating Watch Negative; assigned a Stable Outlook;

--Class B at 'AAsf'; removed from Rating Watch Negative; assigned a Stable Outlook.

KEY RATING DRIVERS

U.S. Sovereign Risk: 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. The U.S. sovereign is currently rated 'AAA' with a Stable Outlook by Fitch.

Collateral Performance: Fitch assumes a base case default rate of 19.5%, 58.75% for the 'AAAsf' credit and 54.0% for the 'AAsf' credit stress scenario. The claim reject rate is assumed to be 0.25% for the base case, 2.0% for the 'AAAsf' case and 1.65% for the 'AAsf' case. Fitch applies its standard default timing curve, and trailing 12 months (TTM) CDR and prepayment assumptions for FFELP loans in its cash flow analysis. The TTM average of deferment, forbearance and IBR are 3.62%, 4.39% and 10.22% respectively. These are used as the starting point in the cash flow modeling. Subsequent declines or increases are modeled as per criteria. The borrower benefit of approximately 0.30% was provided by the issuer.

Basis and Interest Rate Risk: Fitch applies its standard basis and interest rate stresses to this transaction as per criteria.

Payment Structure: Cash flow scenarios for the 2005-1 notes were satisfactory under 'AAAsf' and 'AAsf' stress using Fitch's Student Loans ABS cash flow model (SLABS). Total credit enhancement (CE) is provided by overcollateralization and excess spread and the class A notes benefit from subordination provided by the class B note. As of the June 2016 distribution repot, senior and total parity is 109.65% and 101.0%. Liquidity support for the 2005-1 notes is provided by a capitalized Interest Account which is at its floor of $1,006,500. Excess cash can be released from the trust when total parity is 101%.

Maturity Risk: Fitch's SLABS Cash Flow Model indicates that all notes are paid in full on or prior to their legal final maturity of June 22, 2037 for the class A notes and Sept. 22, 2037 for the class B note.

Operational Capabilities: Day to Day servicing is provided by Xerox Education Services. Fitch believes Xerox's servicing operations are acceptable at this time due to its long servicing history.

Under the Counterparty Criteria for Structured Finance and Covered Bonds, dated July 18, 2016, Fitch looks to its own ratings in analyzing counterparty risk and assessing a counterparty's creditworthiness. Fitch's criteria of 'F1+' for investments of greater than 30 days but less than 365 days and 'F1' for debt instruments of less than one year is not included in the Investment Securities definition which represents a criteria variation. Fitch doesn't believe that such variation have a measurable impact upon the ratings assigned.

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, 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 buildup of CE driven by positive excess spread given favorable basis factor conditions could lead to future upgrades.

USE OF THIRD-PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G-10

Form ABS Due Diligence 15-E was not provided or reviewed by Fitch 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. 18 Jul 2016)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=884963

Criteria for Interest Rate Stresses in Structured Finance Transactions and Covered Bonds (pub. 17 May 2016)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=879815

Criteria for Servicing Continuity Risk in Structured Finance (pub. 17 Dec 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=875586

Global Structured Finance Rating Criteria (pub. 27 Jun 2016)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=883130

Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria (pub. 26 Jul 2016)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=881705

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=1010145

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=1010145

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 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/20160809006163/en/

Fitch Ratings
Primary Analyst
Nicole Edwards
Director
+1-212-908-9114
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Committee Chairperson
Tracy Wan
Senior Director
+1-212-908-9171
or
Media Relations:
Sandro Scenga, +1 212-908-0278
[email protected]

Source: Fitch Ratings

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