Fitch Affirms Chase Education Loan Trust 2007-A; Outlook Stable
KEY RATING DRIVERS
High Collateral Quality: The collateral consists of 100% 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 currently rates the U.S. 'AAA' with a Stable Outlook.
Sufficient Credit Enhancement (CE): Credit Enhancement is provided by overcollateralization, excess spread and for the class A notes, subordination provided by the class B notes. As of the June 2015 distribution date, total parity is at the release level of 100.00% and senior parity is 105.31%. Cash is being released from the trust given the trust has reached its release level threshold of 100.00% parity.
Adequate Liquidity Support: Liquidity support is provided by a reserve account where the balance is determined as the greater 0.25% of the outstanding pool balance and $1,770,567.
Acceptable Servicing Capabilities: Xerox Education Services, Inc, as the servicer, is responsible for the day-to-day servicing of this trust. In Fitch's opinion, Xerox Education Services is an acceptable servicer of FFELP student loans.
RATING SENSITIVITIES
Since 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 build-up of credit enhancement 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:
Chase Education Loan Trust 2007-A:
--Class A-3 at 'AAAsf'; Outlook Stable;
--Class A-4 at 'AAAsf'; Outlook Stable;
--Class B at 'Asf'; Outlook Stable.
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