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Fitch Affirms Nelnet Student Loan Trust 2012-1Fitch Ratings affirms Nelnet Student Loan Trust 2012-1's senior and subordinate notes at 'AAAsf' and 'AAsf', respectively. The Rating Outlooks remain Stable. KEY RATING DRIVERS High Collateral Quality: The trust collateral comprises Federal Family Education Loan Program (FFELP) loans (including 10.3% of rehabilitated loans as of January 2015) with guaranties provided by eligible guarantors and reinsurance provided by the U.S. Department of Education (ED) for at least 97% of principal and accrued interest. Fitch's current U.S. sovereign rating is 'AAA' with a Stable Outlook. Sufficient Credit Enhancement (CE): CE is provided by overcollateralization (OC; the excess of trust's asset balance over bond balance), excess spread, and for the Class A notes, subordination provided by the Class B notes. As of January 2015, senior and total parities are at 104.79% and 101.40% respectively. The trust is currently releasing cash at its cash release level of the greater of 1.38% OC and $2,000,000. Adequate Liquidity Support: Liquidity support is provided by a Reserve Fund sized at the greater of 0.25% of the principal balance of the notes and 0.10% of the original principal balance of the notes ($343,900). The Reserve Fund is sized at $594,373 as of January 2015. Acceptable Servicing Capabilities: National Education Loan Network, Inc. is the Master Servicer, with Nelnet, Inc. acting as subservicer. Fitch believes National Education Loan Network, Inc. and Nelnet, Inc. to be acceptable servicers of FFELP student loans. RATING SENSITIVITIES Since the FFELP student loan ABS (News - Alert) 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 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 CE driven by positive excess spread given favorable basis factor conditions could lead to future upgrades. Initial Key Rating Drivers and Rating Sensitivities are further described in the presale report titled 'Nelnet Student Loan Trust 2012-1 (US ABS)', dated May 2, 2012. Fitch has affirmed the following: Nelnet Student Loan Trust 2012-1: --Class A at 'AAAsf'; Outlook Stable. --Class B at 'AAsf'; Outlook Stable. A comparison of the transaction's Representations, Warranties & Enforcement Mechanisms (RW&Es) to those of typical RW&Es for that asset class is available by accessing the appendix that accompanies the initial Presale Report. Please refer to 'Nelnet Student Loan Trust 2012-1 - Appendix', published on May 2, 2012 at www.fitchratings.com. Additional information is available at 'www.fitchratings.com' Applicable Criteria and Related Research: --'Global Structured Finance Rating Criteria' (Aug. 4, 2014); --'Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria' (June 23, 2014); --'Nelnet Student Loan Trust 2012-1 (US ABS)' (May 2, 2012); --'Nelnet Student Loan Trust 2012-1 - Appendix' (May 2, 2012); --'Representations, Warranties, and Enforcement Mechanisms in Global Structured Finance Transactions' (April 17, 2012). Applicable Criteria and Related Research: Nelnet Student Loan Trust 2012-1 (US ABS) http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=678369 Nelnet Student Loan Trust 2012-1 - Appendix http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=678416 Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=750530 Global Structured Finance Rating Criteria http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=754389 Representations, Warranties and Enforcement Mechanisms in Global Structured Finance Transactions http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=799248 Additional Disclosure Solicitation Status http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=980826 ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON (News - Alert) THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE. |
