Approximately $1.13 billion of asset backed securities affected.
New York, April 13, 2017 -- Moody's Investors Service, ("Moody's") has
placed on review for upgrade 85 classes of notes from four indentures
and six issuances securitized by the Higher Education Student Assistance
Authority (HESAA). The underlying collateral consists of private
student loans that do not benefit from a guarantee from the US government.
The loans are serviced by HESAA and primarily originated under HESAA's
NJCLASS program. The trustee for all securitizations is Wells Fargo
Bank, N.A.
Complete rating actions are as follow:
Issuer: Higher Education Student Assistance Authority ( State of
New Jersey - 2008 Indenture)
2008 Term Bond A-2, A2 Placed Under Review for Possible Upgrade;
previously on Jan 18, 2013 Downgraded to A2
Issuer: Higher Education Student Assistance Authority (State of
New Jersey - 2012 Indenture)
2012-1A Senior Series Due 12/1/2017, Aa2 Placed Under Review
for Possible Upgrade; previously on Jun 28, 2012 Assigned Aa2
2012-1A Senior Series Due 12/1/2018, Aa2 Placed Under Review
for Possible Upgrade; previously on Jun 28, 2012 Assigned Aa2
2012-1A Senior Series Due 12/1/2019, Aa2 Placed Under Review
for Possible Upgrade; previously on Jun 28, 2012 Assigned Aa2
2012-1A Senior Series Due 12/1/2020, Aa2 Placed Under Review
for Possible Upgrade; previously on Jun 28, 2012 Assigned Aa2
2012-1A Senior Series Due 12/1/2021, Aa2 Placed Under Review
for Possible Upgrade; previously on Jun 28, 2012 Assigned Aa2
2012-1A Senior Series Due 12/1/2022, Aa2 Placed Under Review
for Possible Upgrade; previously on Jun 28, 2012 Assigned Aa2
2012-1A Senior Series Due 12/1/2023, Aa2 Placed Under Review
for Possible Upgrade; previously on Jun 28, 2012 Assigned Aa2
2012-1A Senior Series Due 12/1/2024, Aa2 Placed Under Review
for Possible Upgrade; previously on Jun 28, 2012 Assigned Aa2
2012-1A Senior Series Due 12/1/2025, Aa2 Placed Under Review
for Possible Upgrade; previously on Jun 28, 2012 Assigned Aa2
2012-1A Senior Series Due 12/1/2026, Aa2 Placed Under Review
for Possible Upgrade; previously on Jun 28, 2012 Assigned Aa2
2012-1A Senior Series Due 12/1/2028, Aa2 Placed Under Review
for Possible Upgrade; previously on Jun 28, 2012 Assigned Aa2
2012-1A Senior Series Due 12/1/2029, Aa2 Placed Under Review
for Possible Upgrade; previously on Jun 28, 2012 Assigned Aa2
2012-1A Senior Series Due 12/1/2030, Aa2 Placed Under Review
for Possible Upgrade; previously on Jun 28, 2012 Assigned Aa2
2013-1A Senior Series Due 12/1/2031, Aa2 Placed Under Review
for Possible Upgrade; previously on Jun 20, 2013 Assigned Aa2
2013-1A Senior Series Due 12/1/2035, Aa2 Placed Under Review
for Possible Upgrade; previously on Jun 20, 2013 Assigned Aa2
2013-1A Senior Series Due 12/1/2017, Aa2 Placed Under Review
for Possible Upgrade; previously on Jun 20, 2013 Assigned Aa2
2013-1A Senior Series Due 12/1/2019, Aa2 Placed Under Review
for Possible Upgrade; previously on Jun 20, 2013 Assigned Aa2
2013-1A Senior Series Due 12/1/2018, Aa2 Placed Under Review
for Possible Upgrade; previously on Jun 20, 2013 Assigned Aa2
2013-1A Senior Series Due 12/1/2020, Aa2 Placed Under Review
for Possible Upgrade; previously on Jun 20, 2013 Assigned Aa2
2013-1A Senior Series Due 12/1/2021, Aa2 Placed Under Review
for Possible Upgrade; previously on Jun 20, 2013 Assigned Aa2
2013-1A Senior Series Due 12/1/2022, Aa2 Placed Under Review
for Possible Upgrade; previously on Jun 20, 2013 Assigned Aa2
2013-1A Senior Series Due 12/1/2023, Aa2 Placed Under Review
for Possible Upgrade; previously on Jun 20, 2013 Assigned Aa2
2013-1A Senior Series Due 12/1/2024, Aa2 Placed Under Review
for Possible Upgrade; previously on Jun 20, 2013 Assigned Aa2
2013-1A Senior Series Due 12/1/2025, Aa2 Placed Under Review
for Possible Upgrade; previously on Jun 20, 2013 Assigned Aa2
2013-1A Senior Series Due 12/1/2026, Aa2 Placed Under Review
for Possible Upgrade; previously on Jun 20, 2013 Assigned Aa2
2013-1A Senior Series Due 12/1/2028, Aa2 Placed Under Review
for Possible Upgrade; previously on Jun 20, 2013 Assigned Aa2
2013-1A Senior Series Due 12/1/2029, Aa2 Placed Under Review
for Possible Upgrade; previously on Jun 20, 2013 Assigned Aa2
2013-1B Subordinate Series Due 12/1/2043, A2 Placed Under
Review for Possible Upgrade; previously on Jun 20, 2013 Definitive
Rating Assigned A2
2012-1B Sub Series 2012-1B Due 12/1/2039, A2 Placed
Under Review for Possible Upgrade; previously on Jun 28, 2012
Definitive Rating Assigned A2
Issuer: Higher Education Student Assistance Authority (State of
New Jersey) Student Loan Revenue Bonds (2010-2 Indenture)
2010-2 Serial Bond-A11, Aa3 Placed Under Review for
Possible Upgrade; previously on Jun 23, 2010 Assigned Aa3
2010-2 Serial Bond-A12, Aa3 Placed Under Review for
Possible Upgrade; previously on Jun 23, 2010 Assigned Aa3
2010-2 Serial Bond-A13, Aa3 Placed Under Review for
Possible Upgrade; previously on Jun 23, 2010 Assigned Aa3
2010-2 Serial Bond-A14, Aa3 Placed Under Review for
Possible Upgrade; previously on Jun 23, 2010 Assigned Aa3
2010-2 Serial Bond-A15, Aa3 Placed Under Review for
Possible Upgrade; previously on Jun 23, 2010 Assigned Aa3
2010-2 Serial Bond-A16, Aa3 Placed Under Review for
Possible Upgrade; previously on Jun 23, 2010 Assigned Aa3
2010-2 Serial Bond-A17, Aa3 Placed Under Review for
Possible Upgrade; previously on Jun 23, 2010 Assigned Aa3
2010-2 Serial Bond-A18, Aa3 Placed Under Review for
Possible Upgrade; previously on Jun 23, 2010 Assigned Aa3
2010-2 Serial Bond-A19, Aa3 Placed Under Review for
Possible Upgrade; previously on Jun 23, 2010 Assigned Aa3
2010-2 Serial Bond-A20, Aa3 Placed Under Review for
Possible Upgrade; previously on Jun 23, 2010 Assigned Aa3
2010-2 Serial Bond-A21, Aa3 Placed Under Review for
Possible Upgrade; previously on Jun 23, 2010 Assigned Aa3
2010-2 Serial Bond-A22, Aa3 Placed Under Review for
Possible Upgrade; previously on Jun 23, 2010 Assigned Aa3
2010-2 Serial Bond-A23, Aa3 Placed Under Review for
Possible Upgrade; previously on Jun 23, 2010 Assigned Aa3
2010-2 Serial Bond-A24, Aa3 Placed Under Review for
Possible Upgrade; previously on Jun 23, 2010 Assigned Aa3
2010-2 Serial Bond-A25, Aa3 Placed Under Review for
Possible Upgrade; previously on Jun 23, 2010 Assigned Aa3
2010-2 Serial Bond-A26, Aa3 Placed Under Review for
Possible Upgrade; previously on Jun 23, 2010 Assigned Aa3
2010-2 Serial Bond-A27, Aa3 Placed Under Review for
Possible Upgrade; previously on Jun 23, 2010 Assigned Aa3
2010-2 Serial Bond-A28, Aa3 Placed Under Review for
Possible Upgrade; previously on Jun 23, 2010 Assigned Aa3
2010-2 Serial Bond-A29, Aa3 Placed Under Review for
Possible Upgrade; previously on Jun 23, 2010 Assigned Aa3
2011-1 Serial Bond-9, Aa3 Placed Under Review for
Possible Upgrade; previously on Jul 21, 2011 Assigned Aa3
2011-1 Serial Bond-10, Aa3 Placed Under Review for
Possible Upgrade; previously on Jul 21, 2011 Assigned Aa3
2011-1 Serial Bond-11, Aa3 Placed Under Review for
Possible Upgrade; previously on Jul 21, 2011 Assigned Aa3
2011-1 Serial Bond-12, Aa3 Placed Under Review for
Possible Upgrade; previously on Jul 21, 2011 Assigned Aa3
2011-1 Serial Bond-13, Aa3 Placed Under Review for
Possible Upgrade; previously on Jul 21, 2011 Assigned Aa3
2011-1 Serial Bond-14, Aa3 Placed Under Review for
Possible Upgrade; previously on Jul 21, 2011 Assigned Aa3
2011-1 Serial Bond-15, Aa3 Placed Under Review for
Possible Upgrade; previously on Jul 21, 2011 Assigned Aa3
2011-1 Serial Bond-16, Aa3 Placed Under Review for
Possible Upgrade; previously on Jul 21, 2011 Assigned Aa3
2011-1 Serial Bond-17, Aa3 Placed Under Review for
Possible Upgrade; previously on Jul 21, 2011 Assigned Aa3
2011-1 Serial Bond-18, Aa3 Placed Under Review for
Possible Upgrade; previously on Jul 21, 2011 Assigned Aa3
2011-1 Serial Bond-19, Aa3 Placed Under Review for
Possible Upgrade; previously on Jul 21, 2011 Assigned Aa3
2011-1 Serial Bond-20, Aa3 Placed Under Review for
Possible Upgrade; previously on Jul 21, 2011 Assigned Aa3
2011-1 Serial Bond-21, Aa3 Placed Under Review for
Possible Upgrade; previously on Jul 21, 2011 Assigned Aa3
2011-1 Serial Bond-22, Aa3 Placed Under Review for
Possible Upgrade; previously on Jul 21, 2011 Assigned Aa3
2011-1 Serial Bond-23, Aa3 Placed Under Review for
Possible Upgrade; previously on Jul 21, 2011 Assigned Aa3
2011-1 Serial Bond-24, Aa3 Placed Under Review for
Possible Upgrade; previously on Jul 21, 2011 Assigned Aa3
2011-1 Serial Bond-25, Aa3 Placed Under Review for
Possible Upgrade; previously on Jul 21, 2011 Assigned Aa3
2011-1 Serial Bond-26, Aa3 Placed Under Review for
Possible Upgrade; previously on Jul 21, 2011 Assigned Aa3
Issuer: Higher Education Student Assistant Authority (State of New
Jersey) Student Loan Revenue Bonds, (2010-1 Indenture)
2010 Serial Bond-A12, Aa2 Placed Under Review for Possible
Upgrade; previously on Jan 28, 2010 Assigned Aa2
2010 Serial Bond-A13, Aa2 Placed Under Review for Possible
Upgrade; previously on Jan 28, 2010 Assigned Aa2
2010 Serial Bond-A14, Aa2 Placed Under Review for Possible
Upgrade; previously on Jan 28, 2010 Assigned Aa2
2010 Serial Bond-A15, Aa2 Placed Under Review for Possible
Upgrade; previously on Jan 28, 2010 Assigned Aa2
2010 Serial Bond-A17, Aa2 Placed Under Review for Possible
Upgrade; previously on Jan 28, 2010 Assigned Aa2
2010 Serial Bond-A18, Aa2 Placed Under Review for Possible
Upgrade; previously on Jan 28, 2010 Assigned Aa2
2010 Serial Bond-A19, Aa2 Placed Under Review for Possible
Upgrade; previously on Jan 28, 2010 Assigned Aa2
2010 Serial Bond-A20, Aa2 Placed Under Review for Possible
Upgrade; previously on Jan 28, 2010 Assigned Aa2
2010 Serial Bond-A21, Aa2 Placed Under Review for Possible
Upgrade; previously on Jan 28, 2010 Assigned Aa2
2010 Serial Bond-A22, Aa2 Placed Under Review for Possible
Upgrade; previously on Jan 28, 2010 Assigned Aa2
2010 Serial Bond-A23, Aa2 Placed Under Review for Possible
Upgrade; previously on Jan 28, 2010 Assigned Aa2
2010 Serial Bond-A24, Aa2 Placed Under Review for Possible
Upgrade; previously on Jan 28, 2010 Assigned Aa2
2010 Serial Bond-A25, Aa2 Placed Under Review for Possible
Upgrade; previously on Jan 28, 2010 Assigned Aa2
2010 Serial Bond-A26, Aa2 Placed Under Review for Possible
Upgrade; previously on Jan 28, 2010 Assigned Aa2
2010 Serial Bond-A27, Aa2 Placed Under Review for Possible
Upgrade; previously on Jan 28, 2010 Assigned Aa2
2010 Serial Bond-A28, Aa2 Placed Under Review for Possible
Upgrade; previously on Jan 28, 2010 Assigned Aa2
2010 Serial Bond-A30, Aa2 Placed Under Review for Possible
Upgrade; previously on Jan 28, 2010 Assigned Aa2
2010 Serial Bond-A31, Aa2 Placed Under Review for Possible
Upgrade; previously on Jan 28, 2010 Assigned Aa2
RATINGS RATIONALE
The primary rationale for the rating actions is the improved performance
of the underlying collateral pools and the build-up in credit enhancement
in the transactions. The high quality of the collateral and the
experience and collections tools of HESAA as servicer has led to better
than expected performance of the pools. In addition, the
ratios of total assets to total liabilities (total parity levels) have
continued to increase for all of the issuances over the 12-month
period ending in December 2016 as HESAA has continued to optionally redeem
its notes.
During the review period, Moody's will project lifetime defaults
and net losses on the underlying student loan pools and conduct a detailed
cash flow analysis to assess whether the available credit enhancement
is sufficient to upgrade the current ratings of the affected classes of
notes.
PRINCIPAL METHODOLOGY
The principal methodology used in these ratings was "Moody's Approach
to Rating U.S. Private Student Loan-Backed Securities"
published in January 2010. Please see the Rating Methodologies
page on www.moodys.com for a copy of this methodology.
On 22 March 2017, Moody's released a Request for Comment,
in which it had requested market feedback on potential revisions to its
Approach to Assessing Counterparty Risks in Structured Finance.
If the revised Methodology is implemented as proposed, the Credit
Ratings on HESAA transactions are not expected to be affected by the revised
Methodology. Please refer to Moody's Request for Comment,
titled "Moody's Proposes Revisions to Its Approach to Assessing
Counterparty Risks in Structured Finance," for further details
regarding the implications of the proposed Methodology revisions on certain
Credit Ratings.
Factors that would lead to an upgrade or downgrade of the ratings:
Up
Among the factors that could drive the ratings up is lower defaults and
higher recoveries on the underlying assets than Moody's expects.
Down
Among the factors that could drive the ratings down is higher defaults
and lower recoveries on the underlying assets than Moody's expects.
REGULATORY DISCLOSURES
For further specification of Moody's key rating assumptions and sensitivity
analysis, see the sections Methodology Assumptions and Sensitivity
to Assumptions of the disclosure form.
Moody's did not use any models, or loss or cash flow analysis,
in its analysis.
Moody's quantitative analysis entails an evaluation of scenarios
that stress factors contributing to sensitivity of ratings and take into
account the likelihood of severe collateral losses or impaired cash flows.
Moody's weights the impact on the rated instruments based on its
assumptions of the likelihood of the events in such scenarios occurring.
For ratings issued on a program, series or category/class of debt,
this announcement provides certain regulatory disclosures in relation
to each rating of a subsequently issued bond or note of the same series
or category/class of debt or pursuant to a program for which the ratings
are derived exclusively from existing ratings in accordance with Moody's
rating practices. For ratings issued on a support provider,
this announcement provides certain regulatory disclosures in relation
to the credit rating action on the support provider and in relation to
each particular credit rating action for securities that derive their
credit ratings from the support provider's credit rating.
For provisional ratings, this announcement provides certain regulatory
disclosures in relation to the provisional rating assigned, and
in relation to a definitive rating that may be assigned subsequent to
the final issuance of the debt, in each case where the transaction
structure and terms have not changed prior to the assignment of the definitive
rating in a manner that would have affected the rating. For further
information please see the ratings tab on the issuer/entity page for the
respective issuer on www.moodys.com.
For any affected securities or rated entities receiving direct credit
support from the primary entity(ies) of this credit rating action,
and whose ratings may change as a result of this credit rating action,
the associated regulatory disclosures will be those of the guarantor entity.
Exceptions to this approach exist for the following disclosures,
if applicable to jurisdiction: Ancillary Services, Disclosure
to rated entity, Disclosure from rated entity.
Regulatory disclosures contained in this press release apply to the credit
rating and, if applicable, the related rating outlook or rating
review.
Please see www.moodys.com for any updates on changes to
the lead rating analyst and to the Moody's legal entity that has issued
the rating.
Please see the ratings tab on the issuer/entity page on www.moodys.com
for additional regulatory disclosures for each credit rating.
Donald Lee
Associate Analyst
Structured Finance Group
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
Caroline Pichon
Vice President - Senior Analyst
Structured Finance Group
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
Releasing Office:
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653