Fitch Affirms Senior Notes Issued by South Carolina Student Loan Corp 2013-1; Outlook Stable
KEY RATING DRIVERS
High Collateral Quality: The trust collateral comprises Federal Family Education Loan Program (FFELP) loans (including approximately 8% of rehabilitated rehab 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.
Sufficient Credit Enhancement: CE is provided by overcollateralization (OC; the excess of trust's asset balance over bond balance) and excess spread. As of October 2015, parity is at 104.80%. The parity ratio is expected to continue to rise until the Specified Overcollateralization Amount of the greater of 110% parity or $1,500,000 OC is met.
Adequate Liquidity Support: Liquidity support is provided by a Debt Service Reserve Fund sized at 0.25% of the outstanding pool balance, with a floor of $328,867.
Acceptable Servicing Capabilities: Day-to-day servicing will be provided by South Carolina Student Loan Corporation and Nelnet Servicing, LLC (Nelnet) will be the back-up servicer. All servicers have demonstrated adequate servicing capabilities.
Fitch Ratings reviewed South Carolina Student Loan Corp 2013-1 using its existing and proposed FFELP ABS criteria, listed below.
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, basis risk, and loan extension risk account for the majority of the risk embedded in FFELP student loan transactions. Additional defaults, basis shock beyond Fitch's published stresses, lower than expected payment speed, and other factors 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.
Fitch has affirmed the following ratings:
South Carolina Student Loan Corp 2013-1:
--Class A at 'AAAsf'; Outlook Stable.
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