OREANDA-NEWS. April 14, 2015. Fitch Ratings affirms the EFS Volunteer No. 2, LLC, Series 2012-1 senior notes at 'AAAsf' and the subordinate notes at 'AAsf'. The Rating Outlook remains Stable for both classes.

KEY RATING DRIVERS

High Collateral Quality: The trust collateral is comprised of 100% of Federal Family Education Loan Program (FFELP) loans. The credit quality of the trust collateral is high, in Fitch's opinion, based on the guarantees provided by the transaction's eligible guarantors and reinsurance provided by the U.S. Department of Education (ED) for at least 97% of principal and accrued interest. Fitch rates the U.S. sovereign government '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, and for the senior notes, subordination of the class B note. As of February 2015, total parity is 103.33% (3.22% CE) and senior parity is 106.44% (6.05% CE). The trust is in turbo and cannot release excess cash until all notes are paid in full.

Adequate Liquidity Support: Liquidity support is provided by a reserve account and capitalized interest account. The reserve is equal to the greater of 0.25% of the pool balance and \\$1,046,734, currently sized at \\$1,193,577.67 as of February 2015. The capitalized interest account is sized at \\$10,500,639.61, and is scheduled to release to the trust in May 2015.

Acceptable Servicing Capabilities: PHEAA is responsible for the day to day servicing of the trust. Fitch believes PHEAA to be acceptable servicers of FFELP student loans.

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.

Fitch has affirmed the following ratings:

EFS Volunteer No.2, LLC, Series 2012-1:
--Class A-1 at 'AAAsf'; Outlook Stable;
--Class A-2 at 'AAAsf'; Outlook Stable;
--Class B-1 at 'AAsf'; Outlook Stable.