Fitch Affirms Navient Student Loan Trust 2014-8; Outlook Stable

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings has affirmed the senior notes at 'AAAsf' and subordinate notes at 'Asf' issued by Navient Student Loan Trust 2014-8. The Rating Outlook remains Stable for the senior and subordinate notes.

KEY RATING DRIVERS

High Collateral Quality: The trust collateral consists of 100% of Federal Family Education Loan Program (FFELP) loans, of which, approximately 20% are rehabilitated 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', 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 September 2015, total parity is 101.01% and senior parity is 104.26%. A target overcollateralization amount, equal to the greater of 1% of the adjusted pool balance and $1.5 million, has been met and excess cash is being released from the trust.

Adequate Liquidity Support: Liquidity support is provided by a reserve account. The required reserve account balance is 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. is responsible for the day-to-day servicing of the student loans in this trust. Fitch deems Navient an acceptable servicer of FFELP loans.

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 2014-8:

--Class A-1 at 'AAAsf' Outlook Stable;

--Class A-2 at 'AAAsf' Outlook Stable;

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

--Class B at 'Asf' Outlook Stable.

Additional information is available at www.fitchratings.com.

Applicable Criteria

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

Related Research

Navient Student Loan Trust 2014-8 - Appendix

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=816228

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=993847

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=993847

Endorsement Policy

https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31

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View source version on businesswire.com: http://www.businesswire.com/news/home/20151111006456/en/

Fitch Ratings, Inc.
Victoria Ohorodnyk, +1-212-908-0866
Associate Director
33 Whitehall Street
New York, NY 10004
or
Committee Chairperson
Kevin Corrigan, +1-212-908-0156
Senior Director
or
Media Relations
Sandro Scenga, New York
+1-212-908-0278
[email protected]

Source: Fitch Ratings

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