Fitch Ratings has affirmed the rating on the Vermont Student Assistance Corporation (VSAC) Senior Series 2011A-1, which are backed by collateral comprised of private student loans. The Rating Outlook on all the notes is Stable.
The affirmation is based on loss coverage multiples commensurate with the notes currently assigned ratings and are based on the review of the collateral performance data as of March 2012. Loss coverage multiples were determined by comparing the projected net loss amount to available credit enhancement. A recovery rate was applied, which was determined to be appropriate based on the latest data provided by the issuer.
In addition VSAC 2011A-1 bonds benefit from a debt service reserve fund which contains a replenishment mechanism backed by a moral obligation of the state of Vermont (the state).
Currently the state of Vermont is rated 'AAA' by Fitch. This feature of the moral obligation from the state has yielded VSAC 2011A-1 transaction with a two-notch increase in its credit ratings above the underlying credit rating assigned to the transaction, which was initially 'A+'.
Credit enhancement consists of excess spread and overcollateralization. Fitch assumed excess spread to be the weighted average coupon on the loans less trust expenses and the weighted average interest rate on the notes.
The collateral supporting VSAC's 2011A-1 trust's notes consists entirely of private student loans originated and serviced by VSAC, which is not rated by Fitch. The private student loans are intended to assist individuals in financing their undergraduate or graduate education beyond what the Federal Family Education Loan Program (FFELP) affords. The private student loan collateral as well as the student loan revenue bonds have a fixed interest rate, so there is no basis risk in this transaction.
Fitch affirms Vermont Student Assistance Corporation (VSAC), Series 2011A-1 and maintains the Stable Outlook as follows:
--Serial 2013-1 at 'AAsf'; Outlook Stable;
--Serial 2014-1 at 'AAsf'; Outlook Stable;
--Serial 2015-1 at 'AAsf'; Outlook Stable;
--Serial 2016-1 at 'AAsf'; Outlook Stable;
--Serial 2017-1 at 'AAsf'; Outlook Stable;
--Serial 2018-1 at 'AAsf'; Outlook Stable;
--Serial 2019-1 at 'AAsf'; Outlook Stable;
--Serial 2020-1 at 'AAsf'; Outlook Stable;
--Serial 2021-1 at 'AAsf'; Outlook Stable;
--Serial 2022-1 at 'AAsf'; Outlook Stable;
--Serial 2023-1 at 'AAsf'; Outlook Stable;
--Serial 2024-1 at 'AAsf'; Outlook Stable;
--Serial 2025-1 at 'AAsf'; Outlook Stable;
--Term 2027-1 at 'AAsf'; Outlook Stable.
Additional information is available atwww.fitchratings.com. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.
Applicable Criteria and Related Research:
--'U.S. Private Student Loan ABS Criteria' (Jan. 31, 2012);
--'Global Structured Finance Rating Criteria' (June 6, 2012);
--'Rating Guidelines for Moral Obligations' (April 20, 2012).
Applicable Criteria and Related Research:
U.S. Private Student Loan ABS Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=6...
Global Structured Finance Rating Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=6...
Rating Guidelines for Moral Obligations
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=6...
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NEW YORK--(BUSINESS WIRE)--Fitch Ratings 7.16.2012
Fitch affirms Vermont Student Assistance Corp Senior Series 2011A-1 notes
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