OREANDA-NEWS. January 26, 2016. Fitch Ratings has taken the following rating actions on Keycorp Student Loan Trust 2006-A (Group I):

--Class A-2 at 'AAAsf'; Rating Watch Negative maintained;
--Class B affirmed at 'A+sf'; Outlook Stable.

KEY RATING DRIVERS

Maturity Risk: The Rating Watch Negative action is based on the heightened risk of KSLT 2006-A class A-2 missing its legal final maturity of February 25, 2038, which would result in an event of default. In an event of such technical default, Fitch would expect ultimate repayment of full principal and interest after the legal final. The magnitude of the rating action could vary depending on remaining time to maturity, recent payment trends, issuer actions such as loan purchases, or other external factors.

High Collateral Quality: The trust collateral is comprised 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. Fitch's current U.S. sovereign rating is 'AAA' with a Stable Rating Outlook.

Sufficient Credit Enhancement: CE is provided by overcollateralization (OC; the excess of trust's asset balance over bond balance), excess spread, and for the Class A notes, subordination provided by the Class B notes. As of November 2015, total parity is 100.25%, the release level, and senior parity is 105.43%. The parity ratios are expected to stay at this level as the trust is past the stepdown date, and should continue to release cash.

Adequate Liquidity Support: Liquidity support is provided by a reserve account which is determined as the greater of 0.25% of the pool balance and \\$345,001. It is currently sized at the floor of \\$345,001.

Acceptable Servicing Capabilities: KeyBank National Association is the Master Servicer for the transaction, with Pennsylvania Higher Education Assistance Agency and Great Lakes Educational Loan Services, Inc. acting as Subservicers. Fitch believes KeyBank National Association, Pennsylvania Higher Education Assistance Agency, and Great Lakes Educational Loan Services, Inc. to be acceptable servicers 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, 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.