Fitch Affirms North Texas Higher Education Authority, Inc., Series 2010-2

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings affirms the North Texas Higher Education Authority, Inc. 2010-2 Indenture of Trust series 2010-2 student loan revenue bonds at 'AAAsf'. The Rating Outlook remains Stable.

KEY RATING DRIVERS

High Collateral Quality: The trust collateral consists of 100% (88.52% Non-Rehab; 11.48% Rehab) 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 '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 April 2015, total parity is 116.34% (14.04% CE). The trust is a turbo structure therefore no cash is released until the note is paid in full.

Adequate Liquidity Support: Liquidity support is provided by a reserve account. The reserve is sized equal to the greater of 0.50% of the pool balance, and $ 500,000.

Acceptable Servicing Capabilities: Higher Education Servicing Corporation (HESC) is the master servicer and is providing day-to-day servicing for 19.32% of the loans. Day-to-day servicing for the remainder of the portfolio is provided by Edfinancial Services, LLC (Edfinancial) (65.66%) and Nelnet Servicing, LLC (Nelnet) (15.02%). Pennsylvania Higher Education Assistance Agency (PHEAA) is the backup servicer for those loans serviced by HESC and Edfinancial. All servicers have demonstrated adequate servicing capabilities.

RATING SENSITIVITIES

Since FFELP student loan ABS rely 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 and basis risk account for the majority of the risk embedded in FFELP student loan transactions. Additional defaults and basis shock beyond Fitch's published stresses could result in future downgrades. Likewise, a buildup of credit enhancement driven by positive excess spread given favorable basis factor conditions could lead to future upgrades.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research:

--'Global Structured Finance Rating Criteria' (May 20, 2014);

--'Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria' (June 23, 2014).

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=982998

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Fitch Ratings

Primary Analyst

Paul Jiang, +1-212-908-9120

Associate Director

Fitch Ratings, Inc.

33 Whitehall St.

New York, NY 10004

or

Committee Chairperson

Kevin Corrigan, +1-212-908-9156

Senior Director

or

Media Relations

Sandro Scenga, New York, +1-212-908-0278

[email protected]

Source: Fitch Ratings