OREANDA-NEWS. October 13, 2015. Fitch Ratings expects to rate Massachusetts Educational Financing Authority (MEFA) education loan revenue bonds, issue I, series 2015B-1 and 2015B-2 (together series 2015-B) as follows:

--\\$75,000,000 series 2015B 'Asf (exp)'; Outlook Stable.

KEY RATING DRIVERS
Adequate Collateral Quality: The master trust will be collateralized by approximately \\$587.9 million of existing fixed-rate private student loans originated with proceeds from earlier bond issuances and \\$75 million of new MEFA Refinance Loans (refinance loans) to be originated from deal closing until June 30, 2016. All existing loans have been credit tested, and the refinance loans will be originated according to the underwriting criteria for the MEFA loan program (see Appendix A, page 9).

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 expected to be approximately 9.16%. The initial parity ratio is expected to be approximately 110.08%, and cash can be released from the trust at 109% parity. Liquidity support is provided by a capitalized interest account and a debt service reserve fund sized at 1.0% of the outstanding bond balance with a minimum of \\$8 million.

Satisfactory Servicing Capabilities: Day-to-day servicing will be provided by Xerox Education Services LLC (Xerox-ES), 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 2015B', dated Oct. 9, 2015, available by clicking on the link.

DUE DILIGENCE USAGE
No third-party due diligence was provided or reviewed in relation to this rating action.