Fitch Rates IOWA 2015-A

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings assigns ratings to the Iowa Student Loan Liquidity Corporation (ISL) Series 2015-A (ISL Series 2015-A) student loan revenue bonds as follows:

--$1,800,000 2015-A 2018 'Asf'; Outlook Stable;

--$2,400,000 2015-A 2019 'Asf'; Outlook Stable;

--$2,800,000 2015-A 2020 'Asf'; Outlook Stable;

--$3,500,000 2015-A 2021 'Asf'; Outlook Stable;

--$2,500,000 2015-A 2022 'Asf'; Outlook Stable;

--$2,600,000 2015-A 2023 'Asf'; Outlook Stable;

--$2,800,000 2015-A 2024 'Asf'; Outlook Stable;

--$2,300,000 2015-A 2025 'Asf'; Outlook Stable;

--$2,100,000 2015-A 2026 'Asf'; Outlook Stable;

--$3,710,000 2015-A 2027 'Asf'; Outlook Stable;

--$5,190,000 2015-A 2030 'Asf'; Outlook Stable;

--S6,100,000 2015-A 2034 'Asf'; Outlook Stable.

KEY RATING DRIVERS

Adequate Collateral Quality: The series 2015-A trust will be collateralized by loans originated under FFELP and existing and new fixed and variable rate private student loans. The private student loans are credit tested and have been or will be originated under ISL's private loan program. The FFELP loans have 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: Transaction cash flows were satisfactory under all stressed scenarios at Fitch's 'A' rating category. Credit enhancement (CE) is provided by overcollateralization (OC; the excess of the trust's asset balance over the bond balance) and excess spread. The parity ratio (total assets to total liabilities) is expected to be 130.86% at closing. Liquidity support is provided by a reserve account sized at 4% of the bond balance and a $1.134 million capitalized interest account. Cash can be released at 133.84% parity.

Satisfactory Servicing Capabilities: ISL will service the portfolio of loans, and Pennsylvania Higher Education Assistance Agency (PHEAA) will act as the backup servicer. Fitch views ISLLC and PHEAA as adequate servicers.

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 evaluated the sensitivity of the ratings assigned to IOWA Series 2015-A to increased defaults, reduced recoveries and excess spread over the life of the transaction. Fitch's analysis found that the transaction displays some sensitivity to the above factors, showing a potential downgrade to 'B-'. For further discussion of our sensitivity analysis and Fitch's stress analysis please see the presale titled 'ISL Series 2015-A', dated April 27, 2015.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research:

--'Global Structured Finance Rating Criteria' (March 2015);

--'U.S. Private Student Loan ABS Criteria' (January 2014);.

--'Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria' (June 2014).

Applicable Criteria and Related Research:

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=864268

U.S. Private Student Loan ABS Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=730956

Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=750530

Iowa Student Loan Liquidity Corporation Series 2015-A (US ABS)

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=864791

Iowa Student Loan Liquidity Corporation Series 2015-A -- Appendix

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=864872

Representations, Warranties and Enforcement Mechanisms in Global Structured Finance Transactions

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=863817

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=984631

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.

Fitch Ratings
Media Relations
Sandro Scenga, New York
Tel: +1 212-908-0278
Email: [email protected]
or
Primary Analyst
Nicole Edwards
Director
+1-212-908-9114
Fitch Ratings, Inc.
33 Whitehall St
New York, NY 10004
or
Secondary Analyst
Paul Jiang
Associate Director
+1-212-908-0120
or
Committee Chairperson
Steven Stubbs
Senior Director
+1-212-908-0676

Source: Fitch Ratings

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