Fitch Affirms New Jersey HESAA 2009 Indenture of Trust

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings affirms the ratings of the student loan revenue bonds issued by the New Jersey Higher Education Student Assistance Authority (NJHESAA) under the 2009 master trust indenture at 'Asf'. The Rating Outlook remains Stable.

A detailed list of rating actions follows at the end of this press release.

KEY RATING DRIVERS

Adequate Collateral Quality: The trust is collateralized by approximately $288.5 million of private student loans as of September 2015. The loans were originated under the NJCLASS Loan Program by NJHESAA. The projected remaining defaults are expected to range between 13% - 15% of the current pool balance. A recovery rate of 60% was applied, which was determined to be appropriate based on data provided by the issuer.

Sufficient Credit Enhancement (CE): CE is provided by overcollateralization and excess spread. The parity ratio is currently at 107.17% as of September 2015. Total parity level has consistently increased over the years, since the trust has not reached its release level of 115%. On or after June 2021, no cash releases will be permitted and any excess cash will be used to turbo the existing bonds.

Adequate Liquidity Support: Liquidity support for the trust is provided by a debt service reserve fund currently at $7,018,000, representing approximately 2% of the bond balance. The reserve requirement is equal to the greater of 2% of the outstanding principal balance and $2.25 million.

Servicing Capabilities: Day-to-day servicing is provided by NJHESAA. Fitch believes they are an acceptable servicer of private student loans.

RATING SENSITIVITIES

As Fitch's base case default proxy is derived primarily from historical collateral performance, actual performance may differ from the expected performance, resulting in higher loss levels than the base case. This will result in a decline in CE and remaining loss coverage levels available to the notes and may make certain note ratings susceptible to potential negative rating actions, depending on the extent of the decline in coverage. Fitch will continue to monitor the performance of the trust.

DUE DILIGENCE USAGE

No third-party due diligence was provided or reviewed in relation to this rating action.

Fitch has affirmed the following ratings on the New Jersey Higher Education Student Assistance Agency Series 2009 Indenture of Trust:

-- Serial 2016-1 at 'Asf'; Outlook Stable;

-- Serial 2016-2 at 'Asf'; Outlook Stable;

-- Serial 2017-1 at 'Asf'; Outlook Stable;

-- Serial 2017-2 at 'Asf'; Outlook Stable;

-- Serial 2018-1 at 'Asf'; Outlook Stable;

-- Serial 2018-2 at 'Asf'; Outlook Stable;

-- Serial 2019-1 at 'Asf'; Outlook Stable;

-- Serial 2019-2 at 'Asf'; Outlook Stable;

-- Serial 2020-1 at 'Asf'; Outlook Stable;

-- Serial 2020-2 at 'Asf'; Outlook Stable;

-- Serial 2021-1 at 'Asf'; Outlook Stable;

-- Serial 2021-2 at 'Asf'; Outlook Stable;

-- Serial 2022 at 'Asf'; Outlook Stable;

-- Serial 2023 at 'Asf'; Outlook Stable;

-- Term 2024 at 'Asf'; Outlook Stable;

-- Term 2030 at 'Asf'; Outlook Stable.

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/creditdesk/reports/report_frame.cfm?rpt_id=744158

Global Structured Finance Rating Criteria (pub. 06 Jul 2015)https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=867952

Rating Guidelines for Moral Obligations (pub. 18 Apr 2013)https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=704882

U.S. Private Student Loan ABS Criteria (pub. 31 Jul 2015)https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=868836

Additional Disclosures

Dodd-Frank Rating Information Disclosure Formhttps://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=999496

Solicitation Statushttps://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=999496

Endorsement Policyhttps://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/20160212005881/en/

Fitch Ratings, Inc.
Primary Analyst
Emily Lee, +1-212-908-0667
Director
33 Whitehall Street
New York, NY 10004
or
Committee Chairperson
Michael Dean, +1-212-908-0556
Managing Director
or
Media Relations, New York
Sandro Scenga, +1-212-908-0278
[email protected]

Source: Fitch Ratings

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