OREANDA-NEWS. Fitch Ratings has affirmed Nelnet Student Loan Trust Series 2009-2 (Nelnet 2009-2) at 'AAAsf'. The Rating Outlook is Stable.

KEY RATING DRIVERS

High Collateral Quality: The trust collateral is comprised of 100% of 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 at 'AAA' with a Stable Outlook.

Sufficient Credit Enhancement: CE is provided by overcollateralization (OC; the excess of trust's asset balance over bond balance) and excess spread. As of December 2015, total parity is 127.5% (21.57% CE). The trust is in turbo and no cash will be released until the notes are paid in full.

Adequate Liquidity Support: Liquidity support is provided by a Debt Service Reserve Fund equal to the greater of 0.25% of the pool balance and $446,077, currently sized at $587,095.

Acceptable Servicing Capabilities: National Education Loan Network Inc., as master servicer, and Nelnet Inc., as subservicer, are responsible for the day-to-day servicing of the trust. Fitch believes both National Education Loan Network and Nelnet to be acceptable servicers of FFELP student loans.
On Nov. 18, 2015, Fitch released its exposure draft which delineates revisions it plans to make to the 'Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria', dated June 23, 2014. Fitch has reviewed this transaction under both the existing and proposed criteria.

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.