Fitch Releases Updated U.S. FFELP Student Loan ABS Criteria.NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- Recent regulatory changes to the Federal Family Education Loan Program The Federal Family Education Loan Program (FFELP) is a United States Department of Education program that provides for private organizations to market, originate, and service federally guaranteed loans, such as Stafford and PLUS loans to students and their parents. (FFELP FFELP Federal Family Education Loan Program ) through the Higher Education Reconciliation Act and the Emergency Appropriations Act, coupled with industry changes that have fundamentally affected the economics and financing of Federal Family Education Loan Program (FFELP) loans, have prompted Fitch Ratings to enhance its rating methodology for U.S. FFELP student loan asset-backed securities (ABS). Fitch's report says that key rating considerations remain place, with changes focused on the cash flow scenario analysis. 'The scenarios include new increasing and decreasing USD USD In currencies, this is the abbreviation for the U.S. Dollar. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. LIBOR LIBOR See: London Interbank Offered Rate LIBOR See London interbank offered rate (LIBOR). interest rate scenarios coupled with new basis risk stresses to compensate for transactions that fund FFELP CP and T-Bill based assets with USD LIBOR, taxable and tax-exempt auction rate securities in addition to the use of remarketing rate notes,' said Managing Director Claire Mezzanotte. Additionally, the criteria incorporate refinements to assumptions regarding borrower benefit programs used by issuers as part of their product offerings. 'The continued prevalence of borrower benefit programs warranted a new scenario, which Fitch calls the Borrower Benefit Scenario. This scenario stresses borrower benefits at or above historical utilization rates. Borrower benefits are incorporated in the cash flows as either a prepayment or a reduction in borrower yield, which serves to limit the amount of excess spread, a primary form of credit enhancement,' said Director Andrea Murad. 'Fitch's Base Case Scenario is similar to the borrower benefit scenario, except that no borrowers qualify for any borrower benefits, providing a relative measure of the costs of borrower benefits to a transaction.' 'Rating U.S. Federal Family Education Loan Program Student Loan ABS' is available on the Fitch Ratings web site at www.fitchratings.com. Fitch's rating definitions and the terms of use Terms of Use are rules set up by the owner of an intellectual property or service to govern how they may be legally used. In many cases, terms of service are used as a contractual agreement between a company and users of a service they provide. of such ratings are available on the agency's public site, 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 Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental are also available from the 'Code of Conduct' section of this site. |
|
||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion