Fitch Rates Massachusetts Educational Financing Auth. Issue I Series 2015A (AMT)

NEW YORK--(BUSINESS WIRE)-- Fitch rates Massachusetts Educational Financing Authority (MEFA) Education Loan Revenue Bonds, Issue I, Series 2015A (AMT) as follows:

--$2,000,000 2015A due Jan. 1, 2017 5.0%, 'Asf'; Outlook Stable;

--$1,500,000 2015A due Jan.1, 2018 5.0%, 'Asf'; Outlook Stable;

--$5,000,000 2015A due Jan. 1, 2019 3.5%, 'Asf'; Outlook Stable;

--$12,000,000 2015A due Jan. 1, 2019 5.0%, 'Asf'; Outlook Stable;

--$11,000,000,2015A due Jan. 1, 2020 5.0%, 'Asf'; Outlook Stable;

--$22,000,000 2015A due Jan. 1, 2021 5.0%, 'Asf'; Outlook Stable;

--$290,000 2015A due Jan. 1, 2022 3.0%,'Asf'; Outlook Stable;

--$38,710,000 2015A due Jan. 1, 2022 5.0%, 'Asf'; Outlook Stable;

--$9,000,000 2015A due Jan. 1, 2023 5.0%, 'Asf'; Outlook Stable;

--$34,000,000 2015A due Jan. 1, 2024 5.0%, 'Asf'; Outlook Stable;

--$7,000,000 2015A due Jan. 1, 2025 5.0%, 'Asf'; Outlook Stable;

--$8,000,000 2015A due Jan. 1, 2026 5.0%, 'Asf'; Outlook Stable;

--$1,960,000 2015A due Jan. 1, 2027 4.0%, 'Asf'; Outlook Stable;

--$5,000,000 2015A Jan. 1, 2028 4.0%, 'Asf'; Outlook Stable;

--$5,500,000 2015A due Jan. 1, 2029 4.125%, 'Asf'; Outlook Stable;

--$8,000,000 2015A due Jan. 1, 2030 4.25%, 'Asf'; Outlook Stable;

--$12,000,000 2015A due Jan. 1, 2031 4.25%, 'Asf'; Outlook Stable;

--$1,800,000 2015A due Jan. 1, 2032 4.25%, 'Asf'; Outlook Stable.

KEY RATING DRIVERS

Adequate Collateral Quality: The master trust will be collateralized by approximately $605.2 million existing fixed-rate private student loans originated with proceeds from certain earlier bond issuances and approximately $198.8 million of new fixed-rate private student loans to be originated from deal closing based on a loan origination schedule that will end June 30, 2016. All existing loans have been credit tested, and new fixed-rate private student loans will be originated according to the underwriting criteria for the MEFA loan program.

Sufficient Credit Enhancement: Transaction cash flows were satisfactory under all stressed scenarios of Fitch's 'Asf' rating category. Credit enhancement (CE) is provided by overcollateralization (OC) and excess spread. The initial CE for the notes is approximately 9.97%. The initial parity ratio is 111.08% and cash is not expected to be released until parity exceeds 109.0%. Liquidity support is provided by a $13.2 million capitalized interest fund and a debt service reserve fund sized at approximately $8.84 million.

Acceptable Servicing Capabilities: Day-to-day servicing will be provided by Xerox Education Services (XEROX), which has been servicing MEFA loans since 2003. Fitch views its servicing capabilities as highly effective.

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 and/or prepayment speeds than the base case. This will result in a decline in available CE and the remaining loss coverage levels available to the notes. Therefore, note ratings may be susceptible to potential negative rating actions, depending on the extent of the decline in the coverage.

Rating sensitivity results should only be considered as one potential outcome, as the transaction is exposed to multiple dynamic risk factors. Rating sensitivity should not be used as an indicator of future rating performance.

Fitch's stress analysis is discussed in the presale titled 'Massachusetts Educational Financing Authority, Issue I, Series 2015A', dated May 21, 2015.

DUE DILIGENCE USAGE

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

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

U.S. Private Student Loan ABS Criteria (pub. 29 Jan 2014)

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

Related Research

Massachusetts Educational Financing Authority, Issue I, Series 2015A -- Appendix

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=865763

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=987703

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=987703

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/20150709006311/en/

Fitch Ratings
Primary Analyst
Nicole Edwards
Director
+1-212-908-9114
Fitch Ratings, Inc.
33 Whitehall St
New York, NY 10004
or
Secondary Analyst
Victoria Ohorodnyk
Associate Director
+1-212-908-0866
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

---

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

---

You May Also Be Interested In

• Rep Com International Brings Its New Data Center Division to the Metro Connect Fall and Datacloud USA Conferences in Austin
• Duke Energy Foundation launches $175,000 Main Street Revitalization grant program to support South Carolina communities
• Eurofins Scientific SE: Weekly Report on Share Repurchases from 10th August to 14th August 2026