Fitch Affirms MEFA Issue I; Outlook Stable

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings has affirmed the ratings for the student loan revenue bonds issued by Massachusetts Educational Financing Authority (MEFA) Issue I at 'Asf'. The Rating Outlook remains Stable.

A full list of rating actions follows at the end of this release.

KEY RATING DRIVERS

Adequate Collateral Quality: The master trust is currently collateralized by approximately $590 million of private student loans as of March 2015. The loans were originated under MEFA's Private Student Loan Programs. The projected lifetime defaults are expected to range between 8%-10% of the initial pool balance. A recovery rate of 35% was applied, which is based on data provided by the issuer.

Sufficient Credit Enhancement: CE is provided by overcollateralization and excess spread. Total parity ratio has increased since last year's review to 111.44% (March 2015) from 109.99% (March 2014). The trust may release excess cash if it reaches its release parity threshold of 110.75%, provided the total outstanding bond balance is greater than $65,546,500.

Adequate Liquidity Support: Liquidity support is provided by a debt service reserve fund sized at the greater of 1.40% of the current bond balance and $8,000,000. As of March 2015, the debt service reserve fund has a balance of $8,225,350.

Adequate Servicing Capabilities: Xerox Education Services, LLC is responsible for the day-to-day servicing of the loans in the trust. In Fitch's opinion, they are an acceptable servicer of private student loans.

RATING SENSITIVITIES

As Fitch's base case default proxy is derived primarily from historical collateral performance, actual performance may differ from the expected performance, resulting in higher loss levels than the base case. This will result in a decline in CE and remaining loss coverage levels available to the bonds and may make certain bond ratings susceptible to potential negative rating actions, depending on the extent of the decline in coverage. Fitch will continue to monitor the performance of the trust.

Fitch has affirmed the following ratings:

Massachusetts Educational Financing Authority Issue I (Series 2009, 2010A, 2010B and 2014):

Series 2009:

--Series 2009 1/1/2016 at 'Asf' Outlook Stable;

--Series 2009 5.25% due January 1, 2016 at 'Asf' Outlook Stable;

--Series 2009 1/1/2017 at 'Asf' Outlook Stable;

--Series 2009 1/1/2018 at 'Asf' Outlook Stable;

--Series 2009 5.5% due January 1, 2018 at 'Asf' Outlook Stable;

--Series 2009 1/1/2019 at 'Asf' Outlook Stable;

--Series 2009 5.5% due January 1, 2019 at 'Asf' Outlook Stable;

--Series 2009 1/1/2020 at 'Asf' Outlook Stable;

--Series 2009 5.75% due January 1, 2020 at 'Asf' Outlook Stable;

--Series 2009 5.75% term bonds due January 1, 2023 at 'Asf' Outlook Stable;

--Series 2009 6.00% term bonds due January 1, 2028 at 'Asf' Outlook Stable.

Series 2010:

--2010 Series A 1/1/2016 at 'Asf' Outlook Stable;

--2010 Series A 1/1/2017 at 'Asf' Outlook Stable;

--2010 Series A 1/1/2018 at 'Asf' Outlook Stable;

--2010 Series A 1/1/2019 at 'Asf' Outlook Stable;

--2010 Series A 1/1/2020 at 'Asf' Outlook Stable;

--2010 Series A 1/1/2021 at 'Asf' Outlook Stable;

--2010 Series A 1/1/2022 at 'Asf' Outlook Stable;

--2010 Series A 1/1/2025 at 'Asf' Outlook Stable;

--2010 Series A 1/1/2026 at 'Asf' Outlook Stable;

--2010 Series A 1/1/2027 at 'Asf' Outlook Stable;

--2010 Series A 1/1/2028 at 'Asf' Outlook Stable;

--2010 Series A 1/1/2029 at 'Asf' Outlook Stable;

--2010 Series A 1/1/2030 at 'Asf' Outlook Stable.

--2010 Series B 1/1/2016 at 'Asf' Outlook Stable;

--2010 Series B 1/1/2017 at 'Asf' Outlook Stable;

--2010 Series B 1/1/2018 at 'Asf' Outlook Stable;

--2010 Series B 1/1/2019 at 'Asf' Outlook Stable;

--2010 Series B 1/1/2020 at 'Asf' Outlook Stable;

--Series 2010 Term bond 1/1/2023 at 'Asf' Outlook Stable;

--Series 2010 Term bond 1/1/2031 at 'Asf' Outlook Stable.

Series 2014:

--$4,000,000 Series 2014 1/1/2017 'Asf'; Outlook Stable;

--$11,000,000 Series 2014 1/1/2018 'Asf'; Outlook Stable;

--$6,000,000 Series 2014 1/1/2019 'Asf'; Outlook Stable;

--$7,000,000 Series 2014 5% due 1/1/2019 'Asf'; Outlook Stable;

--$4,000,000 Series 2014 1/1/2020 'Asf'; Outlook Stable;

--$2,510,000 Series 2014 1/1/2021 'Asf'; Outlook Stable;

--$37,490,000 Series 2014 5% due 1/1/2021 'Asf'; Outlook Stable;

--$5,000,000 Series 2014 1/1/2022 'Asf'; Outlook Stable;

--$820,000 Series 2014 1/1/2023 'Asf'; Outlook Stable;

--$7,180,000 Series 2014 5% due 1/1/2023 'Asf'; Outlook Stable;

--$7,000,000 Series 2014 1/1/2024 'Asf'; Outlook Stable;

--$33,600,000 Series 2014 1/1/2025 'Asf'; Outlook Stable;

--$24,000,000 Series 2014 1/1/2026 'Asf'; Outlook Stable;

--$4,000,000 Series 2014 1/1/2027 'Asf'; Outlook Stable;

--$14,000,000 Series 2014 5% due 1/1/2027 'Asf'; Outlook Stable;

--$18,100,000 Series 2014 1/1/2032 'Asf'; Outlook Stable.

Additional information is available at www.fitchratings.com.

Applicable Criteria

Global Structured Finance Rating Criteria (pub. 31 Mar 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=864268

U.S. Private Student Loan ABS Criteria (pub. 29 Jan 2014)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=730956

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=986328

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=986328

Endorsement Policy

https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31

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 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.

View source version on businesswire.com: http://www.businesswire.com/news/home/20150612005792/en/

Fitch Ratings
Primary Analyst
Emily Lee
Director
+1-212-908-0667
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Committee Chairperson
Tracy Wan
Senior Director
+1-212-908-9171
or
Media Relations
Sandro Scenga, +1 212-908-0278
[email protected]

Source: Fitch Ratings

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