Fitch Rates DRB Prime Student Loan Trust 2015-B
-- Class A-1 notes 'BBBsf'; Outlook Stable;
-- Class A-2 notes 'BBB+sf'; Outlook Stable;
-- Class A-3 notes 'BBB+sf'; Outlook Stable.
KEY RATING DRIVERS
Strong Collateral Quality: The 2015-B trust pool consists of credit-tested private student loans originated under DRB's private student loan programs and underwritten to the respective guidelines. As of the Aug. 31, 2015 statistical cutoff date, the weighted average Fair Isaac Corp. (FICO) score at origination was 765; 100% of the loans are in active repayment; and none of the loans were more than 30 days past due or involved in a bankruptcy proceeding.
Sufficient Credit Enhancement: Transaction cash flows were satisfactory under all stressed scenarios at Fitch's 'BBBsf' and 'BBB+sf' rating categories for the class A-1, and A-2 & A-3, respectively. Credit enhancement (CE) for each class A note is provided by overcollateralization (OC) and excess spread. At closing, total parity for the class A-1, A-2 and A-3 notes is expected to be at 111.37%; 111.33% and 111.33%, respectively. The initial CE for the class A-1, A-2, and A-3 notes is expected to be 10.21%, 10.17%, and 10.17%, respectively. Funds cannot be released from the trust unless the OC builds up to the greater of 11.94% of the adjusted pool balance for each note or \\$2,361,000, \\$4,629,000, and \\$599,000 for the class A-1, A-2, and A-3 note, respectively (i.e. 2.0% of the initial adjusted pool balance for each note).
Adequate Liquidity Support: Liquidity support is provided by a reserve account, which will be fully funded at closing at 0.25% of the initial note balance. The specified reserve requirement will be the greater of 0.25% of the outstanding note balance and 0.15% of the initial note balance.
Satisfactory Servicing Capabilities: Darien Rowayton Bank, will service all the loans in the 2015-B trust, with First Associates, LLC as a backup servicer. Fitch has reviewed the servicing operations of Darien Rowayton Bank and considers it to be an effective private student loan servicer.
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.
DUE DILIGENCE USAGE
Fitch was provided with due diligence information from KPMG LLP. The third-party due diligence focused on comparing and recalculating certain information with respect to 100 student loan contracts that were randomly selected from 3,728. Fitch considered this information in its analysis, and the findings did not have any impact on the analysis. A copy of the ABS Due Diligence Form-15E received by Fitch in connection with this transaction may be obtained through the link contained on the bottom of the related rating action commentary.
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