Fitch Affirms MEFA Issue K; Outlook Stable
A full list of rating actions follows at the end of this release.
KEY RATING DRIVERS
Adequate Collateral Quality: The trust is collateralized by approximately \$245 million of private student loans as of March 2015. The loans were originated under MEFA's Student Loan Program. The projected lifetime defaults are expected to range between 8% - 10% of the initial pool balance. A recovery rate of 35% was applied, which was based on data provided by the issuer.
Sufficient Credit Enhancement (CE): CE is provided by overcollateralization (the excess of trust's asset balance over bond balance) and excess spread. Total parity ratio has increased slightly to 119.5% (March 2015) from 119.2% (March 2014). The trust just started releasing excess cash, since it has reached its release parity threshold of 119.5%.
Adequate Liquidity Support: Liquidity support is provided by a debt service reserve fund sized at the greater of 2% of the current bond balance and 1% of the initial bond balance. As of March 2015, the debt service reserve fund has a balance of \$4,282,700.
Adequate Servicing Capabilities: Xerox Education Services, LLC is responsible for the day-to-day servicing of the loans in the trust. In Fitch's opinion, they are an acceptable servicer of private student loans.
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 bonds and may make certain bond ratings susceptible to potential negative rating actions, depending on the extent of the decline in coverage. Fitch will continue to monitor the performance of the trust.
Fitch has affirmed the following ratings:
Massachusetts Educational Financing Authority Issue K series 2013:
--Series 2013 7/1/2015 at 'Asf'; Outlook Stable;
--Series 2013 7/1/2016 at 'Asf'; Outlook Stable;
--Series 2013 7/1/2017 at 'Asf'; Outlook Stable;
--Series 2013 7/1/2018 at 'Asf'; Outlook Stable;
--Series 2013 7/1/2019 at 'Asf'; Outlook Stable;
--Series 2013 7/1/2020 at 'Asf'; Outlook Stable;
--Series 2013 7/1/2021 at 'Asf'; Outlook Stable;
--Series 2013 7/1/2022 at 'Asf'; Outlook Stable;
--Series 2013 7/1/2023 at 'Asf'; Outlook Stable;
--Series 2013 7/1/2024 at 'Asf'; Outlook Stable;
--Series 2013 7/1/2025 at 'Asf'; Outlook Stable;
--Series 2013 7/1/2029 at 'Asf'; Outlook Stable;
--Series 2013 7/1/2032 at 'Asf'; Outlook Stable.
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