Fitch Affirms SLC Student Loan Trust 2010-1
KEY RATING DRIVERS
High Collateral Quality: The trust 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. The current U.S. sovereign rating is 'AAA' with a Stable Outlook.
Sufficient Credit Enhancement (CE): The CE is provided by overcollateralization and future excess spread. As of July 2015, total parity is 121.10% (17.42% CE). The trust is a turbo structure, therefore no cash is released until the note is paid in full.
Adequate Liquidity Support: Liquidity support for the notes is provided by a reserve account currently sized at the floor of \\$1,200,450 and a capitalized interest account (CIA) currently sized at \\$11,000,000. Any remaining amounts in the CIA will be released on the October 2016 quarterly distribution date.
Acceptable Servicing Capabilities: Navient Solutions, Inc. (formerly known as Sallie Mae, Inc.), as servicer, is responsible for servicing the portfolio. In Fitch's opinion, Navient Solutions, Inc. is an acceptable servicer of FFELP student loans.
RATING SENSITIVITIES
Since the 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 buildup of CE 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.
Initial Key Rating Drivers and Rating Sensitivities further described in the New Issue Report published on June 28, 2010.
Fitch has affirmed the following rating:
SLC Student Loan Trust Series 2010-1:
--Class A at 'AAAsf'; Outlook Stable.
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