Fitch Affirms KHESLC 2013-2 Sr. Notes; Outlook Stable
KEY RATING DRIVERS
Collateral Performance: Fitch assumes a base case default rate of 17.5% and a 51.5% default rate under the 'AAAsf' credit stress scenario. The claim reject rate is assumed to be 0.25% in the base case and 2% in the 'AAAsf' case. Fitch applies the standard default timing curve in its credit stress cash flow analysis. The trailing 12 month constant default rate, utilized in the maturity stress is 4.2%. The trailing 12 month levels of deferment, forbearance, income-based repayment (before adjustment) and constant prepayment rate (voluntary and involuntary) are 9.7%, 6.9%, 24.7%, and 12.9% respectively, which are used as the starting point in cash flow modelling. Subsequent declines or increases are modelled as per criteria. The borrower benefit is assumed to be approximately 0.26% for interest rate reductions and approximately
Basis and Interest Rate Risk: Fitch applies its standard basis and interest rate stresses to this transaction as per criteria.
Payment Structure: Credit Enhancement (CE) is provided by overcollateralization and excess spread. As of the
Maturity Risk: Fitch's SLABS cash flow model indicates that the 2013-2 notes are paid in full on or prior to their respective legal final maturity in Fitch's
Operational Capabilities: KHESLC is responsible for day-to-day servicing of the trust and
Under Fitch's 'Counterparty Criteria for Structured Finance and Covered Bonds', dated
Under Fitch's criteria 'Rating
RATING SENSITIVITIES
Since FFELP student loan ABS rely on the
DUE DILIGENCE USAGE
USE OF THIRD-PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G-10
Form ABS Due Diligence-15E was not provided to Fitch, or reviewed by Fitch in relation to this rating action.
Additional information is available at www.fitchratings.com.
Applicable Criteria
Counterparty Criteria for Structured Finance and Covered Bonds (pub. 01
https://www.fitchratings.com/site/re/886006
Criteria for Interest Rate Stresses in Structured Finance Transactions and Covered Bonds (pub.
https://www.fitchratings.com/site/re/879815
Global Structured Finance Rating Criteria (pub.
https://www.fitchratings.com/site/re/883130
Rating
https://www.fitchratings.com/site/re/881705
Kentucky Higher Education Student Loan Corporation Series 2013-2 - Appendix
https://www.fitchratings.com/site/re/721495
Additional Disclosures
Dodd-Frank Rating Information Disclosure Form
https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=1013390
Solicitation Status
https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=1013390
Endorsement Policy
https://www.fitchratings.com/regulatory
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