Fitch Affirms Brazos Student Finance Corp, Senior Series 2009-1 Notes; Outlook Stable
--Class 2009 A-1 notes affirmed at 'AAAsf'; Outlook Stable;
--Class 2009 A-S notes affirmed at 'AAAsf'; Outlook Stable.
KEY RATING DRIVERS
Adequate Collateral Quality: BSFC 2009-1 is collateralized by approximately $20.34 million of private student loans; $1.21 million of Health Education Assistance Loans (HEAL); and $144.65 million of Federal Family Education Loan Program (FFELP) loans with guaranties provided by eligible guarantors and reinsurance provided by the U.S. Department of Education (ED) for at least 97% of principal and accrued interest for the FFELP loans. The current rating of the U.S is 'AAA', Outlook Stable. The projected remaining defaults for the private loans are expected to range between 15%-20% using proxy data. A recovery rate of 15% was applied which was determined to be appropriate based on data provided by the issuer.
Sufficient Credit Enhancement (CE): CE is provided by overcollateralization (OC; the excess of trust's asset balance over bond balance) and excess spread. As of August 2015, the senior parity is 236.85% (57.78% CE), and the senior A-S parity is 138.66% (27.88% CE). The trust is in turbo and has not been releasing cash.
Adequate Liquidity Support: Liquidity support is provided by a debt service reserve fund currently sized at the greater of 0.50% of the pool balance and $460,003. As of August 2015, the reserve account balance is $768,195.
Acceptable Servicing Capabilities: Day-to-day servicing is provided by Navient Solutions LLC, Xerox Education Services LLC (Xerox-ES), AES, a servicing division of Pennsylvania Higher Education Assistance Agency (PHEAA), Great Lakes Educational Loan Services, Inc., and Nelnet Servicing. Fitch believes these servicers to be acceptable servicers of FFELP and 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 notes and may make certain note 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.
DUE DILIGENCE USAGE
No third-party due diligence was provided or reviewed in relation to this rating action.
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