Fitch Affirms New Mexico Educational Assistance Foundation 2010-2 Notes at 'AAAsf'

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings has affirmed the New Mexico Educational Assistance Foundation 2010-2 senior notes at 'AAAsf'. The Rating Outlook remains Stable.

KEY RATING DRIVERS

High Collateral Quality: The trust collateral is comprised of 100% of 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.

Sufficient Credit Enhancement: Credit enhancement (CE) is provided by overcollateralization (OC; the excess of trust's asset balance over bond balance) and excess spread. As of June 2015, total parity is 108.85%. The trust is in turbo, and no funds will be released until the notes are paid in full.

Adequate Liquidity Support: Liquidity support for the notes is provided by a reserve fund sized at the greater of 1.10% of the principal balance of the outstanding notes and $250,950. The reserve fund is sized at $1,095,600 as of June 2015.

Acceptable Servicing Capabilities: Day-to-day servicing is provided by the New Mexico Educational Assistance Foundation, and Fitch believes them to be an acceptable servicer of FFELP student loans. Great Lakes Education Loan Servicing, Inc. is the backup servicer for the loans in the trust.

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.

DUE DILIGENCE USAGE

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

Fitch has affirmed the following ratings:

New Mexico Educational Assistance Foundation Series 2010-2:

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

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

--Class A-3 at 'AAAsf'; 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

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=991339

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=991339

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/20150925005398/en/

Fitch Ratings
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Eric Orenstein
Analyst
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Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
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Tracy Wan
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+1-212-908-9171
or
Media Relations
Sandro Scenga, +1 212-908-0278
[email protected]

Source: Fitch Ratings

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