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

OREANDA-NEWS. 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.

Contacts:
Primary Analyst
Nicole Edwards
Director
+1-212-908-9114
Fitch Ratings, Inc.
33 Whitehall St
New York, NY 10004

Secondary Analyst
Victoria Ohorodnyk
Associate Director
+1-212-908-0866

Committee Chairperson
Tracy Wan
Senior Director
+1-212-908-9171

Media Relations: Sandro Scenga, New York, Tel: +1 212-908-0278, Email: sandro.scenga@fitchratings.com.

Additional information is available at www.fitchratings.com.

Applicable Criteria
Global Structured Finance Rating Criteria (pub. 06 Jul 2015)
U.S. Private Student Loan ABS Criteria (pub. 29 Jan 2014)

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

Additional Disclosures
Dodd-Frank Rating Information Disclosure Form
Solicitation Status
Endorsement Policy
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