OREANDA-NEWS. Fitch Ratings affirms the senior and subordinate student loan notes at 'AAAsf' and 'Asf', respectively, issued by Edsouth Indenture No. 9, LLC Series 2015-1. The Rating Outlook on the notes is Stable.

KEY RATING DRIVERS

High Collateral Quality: The trust collateral comprises Federal Family Education Loan Program (FFELP) loans (including approximately 70% of rehabilitated 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. Fitch currently rates the U.S. 'AAA' with a Stable Outlook.

Sufficient Credit Enhancement (CE): CE is provided by overcollateralization (OC; the excess of trust's asset balance over bond balance) and excess spread. Additionally, the class A benefits from subordination provided by the class B notes. As of February 2016, senior and total parity is 105.26% and 102.65%, respectively. Cash may be released to the issuer provided that the target OC, equal to the greater of 2.25% of the adjusted pool balance or $750,000, is met.

Adequate Liquidity Support: Liquidity support is provided by a reserve fund sized at the greater of 0.25% of the pool balance or $752,265. Additionally, the trust benefits from a capitalized interest fund, currently sized at $13.94 million, which will be release based on a predetermined schedule.

Acceptable Servicing Capabilities: Day-to-day servicing will be provided by PHEAA and Great Lakes, which Fitch believes to be acceptable servicers of FFELP student loans.

On Nov. 18, 2015, Fitch released its exposure draft which delineates revisions it plans to make to the 'Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria', dated June 23, 2014. Fitch has reviewed this transaction under both the existing and proposed criteria.

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, basis risk, and loan extension risk account for the majority of the risk embedded in FFELP student loan transactions. Additional defaults, basis shock beyond Fitch's published stresses, lower than expected payment speed, and other factors 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:

Edsouth Indenture No. 9, LLC Series 2015-1:

--Series 2015-1A at 'AAAsf'; Outlook Stable;

--Series 2015-1B at 'Asf'; Outlook Stable.