Fitch Ratings affirms the 'AAAsf' rating on the senior notes and the 'A+sf' rating on the subordinate notes issued by Collegiate Funding Services Education Loan Trust Series 2005-A and 2005-B. The Stable Outlook is maintained on all notes.
KEY RATING DRIVERS
High Collateral Quality: The trust collateral consists of 100% 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. Fitch currently rates the U.S. 'AAA' with a Stable Outlook.
Sufficient Credit Enhancement: While both the senior and subordinate notes will benefit from overcollateralization (OC; the excess of trust's asset balance over bond balance) and future excess spread, the senior notes also benefit from subordination provided by the class B notes. As of December 2014, total senior parity for the senior notes issued from series 2005-A and 2005-B is 107.28% and 106.05%, respectively. Total parity for each trust is at its cash release level of 100.50% and as such cash is being released from the trust.
Adequate Liquidity Support: Liquidity support is provided by a reserve account. The reserve is sized equal to the greater of 0.50% of the outstanding loan balance and $1.3 million for series 2005-A. The reserve is sized equal to the greater of 0.50% of the outstanding loan balance and $1.9 million for series 2005-B.
Acceptable Servicing Capabilities: Xerox Education Services, LLC, doing business as ACS Education Services (ACS) is responsible for servicing the trust. Fitch believes ACS is an acceptable servicer of FFELP student loans.
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.
Fitch has taken the following rating actions:
Collegiate Funding Services Ed Loan Trust, Series 2005-A:
--Class A-2 - Paid in Full;
--Class A-3 affirmed at 'AAAsf'; Outlook Stable;
--Class A-4 affirmed at 'AAAsf'; Outlook Stable;
--Class B affirmed at 'A+sf', Outlook Stable.
Collegiate Funding Services Ed Loan Trust, Series 2005-B:
--Class A-2 - Paid in Full;
--Class A-3 affirmed at 'AAAsf'; Outlook Stable;
--Class A-4 affirmed at 'AAAsf'; Outlook Stable;
--Class B affirmed at 'A+sf', Outlook Stable.
Additional information is available at 'www.fitchratings.com'.
Applicable Criteria and Related Research:
--'Global Structured Finance Rating Criteria' dated August 4, 2014;
--'Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria' dated June 23, 2014.
Applicable Criteria and Related Research:
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
Additional Disclosure
Solicitation Status
http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=969415
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