OREANDA-NEWS. Fitch Ratings affirms the ratings of the notes issued by Brazos Higher Education Authority 2011-2 at 'AAAsf' for the class A notes and 'Asf' for the class B notes. The Rating Outlook remains Stable.

Brazos Higher Education Authority 2011-2

--Class 2011-II-A-2 affirmed at 'AAAsf'; Outlook Stable;
--Class 2011-II-A-3 affirmed at 'AAAsf'; Outlook Stable;
--Class 2011-II-B affirmed at 'Asf'; Outlook Stable.

KEY RATING DRIVERS

Collateral Quality: The 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.

Credit Enhancement (CE): CE is provided by excess spread and overcollateralization. Parity levels continue to improve, and as of Dec. 31, 2015 were 108.96% (8.22% CE), and 103.11% (3.02% CE) for the class A and class B notes, respectively. The class C notes are unrated. In addition, the class A notes benefit from subordination provided by the class B and C notes, and the class B notes benefits from subordination provided by the class C notes. Excess spread will not be released until all of the notes are paid in full.

Liquidity Support: Liquidity support is provided by a reserve account, sized at the greater of 0.25% of the outstanding principal amount of the bonds and $2,173,500.

Servicing Capabilities: The loans are serviced by Xerox Education Services Inc., Pennsylvania Higher Education Assistance Agency, Great Lakes Education Loan Services Inc., Navient LLC (formerly Sallie Mae Servicing), and Nelnet Inc. All servicers are acceptable servicers of FFELP 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 build-up 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.