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Rating Action:

Moody's takes rating actions on 27 classes of notes in 14 National Collegiate Student Loan Trust securitizations

20 Jun 2014

Approximately $3.6 billion of asset backed securities affected.

New York, June 20, 2014 -- Moody's Investors Service upgraded 18 classes, downgraded 5 classes, and confirmed 4 classes of notes in 14 National Collegiate Student Loan Trust Securitizations backed by private (i.e. not government-guaranteed) student loans. The loans are serviced primarily by the Pennsylvania Higher Education Assistance Agency (PHEAA) with U.S. Bank, N.A. acting as the special servicer. The administrator for all securitizations is GSS Data Services, Inc., a wholly owned subsidiary of Goal Structured Solutions, Inc.

RATINGS RATIONALE

The primary rationale for the upgrades is a continued build-up in credit enhancement supporting the affected classes as a result of the substantial pay down of the classes in a sequential-pay structure. Although the ratios of total assets to total liabilities have declined to a range of 68%-86% as of April 2014 from a range of 75%-87% as of April 2013, the top-pay senior classes have benefitted from the rapid deleveraging. Subordination and overcollateralization supporting the 18 upgraded classes of notes increased to a range of 38%-93% as of April 2014 from a range of 36%-90% as of April 2013.

The downgrades of five classes of notes in five securitizations are due to the performance deterioration of the underlying student loan pools and the consequent substantial erosion of total parity levels (the ratios of total assets to total liabilities). To reflect the elevated delinquencies and defaults in the underlying collateral pools, Moody's increased its expected net losses on 2006-4, 2007-1, 2007-2, 2007-3 and 2007-4 securitizations to a range of 45.9%-51.2% from a range of approximately 43.2%-49.6%, of the original pool balances.

The ratings of the Class A tranches also reflect our view that the probability of occurrence of an event of default (EOD) is low. Therefore, the ratings on these tranches continue to reflect sequential principal payments and the resulting differentiation in their credit quality. Despite a substantial amount of credit enhancement supporting the top-pay Class A tranches, the probability of an EOD, however low, negatively affects their credit quality and prevents them from achieving a Aaa rating.

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 Credit Policy page on www.moodys.com for a copy of this methodology.

The performance expectations for a given variable indicate Moody's forward-looking view of the likely range of performance over the medium term. From time to time, Moody's may, if warranted, change these expectations. Performance that falls outside the given range may indicate that the collateral's credit quality is stronger or weaker than Moody's had anticipated when the related securities ratings were issued. Even so, a deviation from the expected range will not necessarily result in a rating action nor does performance within expectations preclude such actions. The decision to take (or not take) a rating action is dependent on an assessment of a range of factors including, but not exclusively, the performance metrics.

Factors that would lead to an upgrade or downgrade of the rating:

Up

Among the factors that could drive the ratings up are a decrease in basis risk and lower net losses on the underlying assets than Moody's expects.

Down

Among the factors that could drive the ratings down are an increase in basis risk and higher net losses on the underlying assets than Moody's expects.

To assess rating implications of the higher expected losses, each individual transaction was run through a variety of stress scenarios using the Structured Finance Workstation® (SFW), a cash flow model developed by Moody's Wall Street Analytics.

The complete rating actions as follow:

Issuer: The National Collegiate Master Student Loan Trust I (2001 Indenture)

Lifetime Expected Net Losses: 25.6% of original pool balance plus any loans added subsequently

NCT-2003AR-11, Confirmed at B1 (sf); previously on Mar 25, 2014 B1 (sf) Placed Under Review for Possible Upgrade

Issuer: National Collegiate Student Loan Trust 2004-1

Lifetime Expected Net Losses: 31.0% of original pool balance plus any loans added subsequently

Cl. A-2, Upgraded to Aa1 (sf); previously on Mar 25, 2014 Upgraded to A1 (sf) and Placed Under Review for Possible Upgrade

Issuer: National Collegiate Student Loan Trust 2004-2

Lifetime Expected Net Losses: 33.9% of original pool balance plus any loans added subsequently

Cl. A-4, Upgraded to Aa1 (sf); previously on Mar 25, 2014 A1 (sf) Placed Under Review for Possible Upgrade

Issuer: National Collegiate Student Loan Trust 2005-1

Lifetime Expected Net Losses: 30.1% of original pool balance plus any loans added subsequently

Cl. A-4, Upgraded to Aa1 (sf); previously on Mar 25, 2014 A1 (sf) Placed Under Review for Possible Upgrade

Issuer: National Collegiate Student Loan Trust 2005-2

Lifetime Expected Net Losses: 38.8% of original pool balance plus any loans added subsequently

Cl. A-3, Upgraded to Aa1 (sf); previously on Mar 25, 2014 Upgraded to Aa3 (sf) and Placed Under Review for Possible Upgrade

Cl. A-4, Upgraded to Baa2 (sf); previously on Mar 25, 2014 Ba1 (sf) Placed Under Review for Possible Upgrade

Issuer: National Collegiate Student Loan Trust 2005-3

Lifetime Expected Net Losses: 36.3% of original pool balance plus any loans added subsequently

Cl. A-3, Upgraded to Aa1 (sf); previously on Mar 25, 2014 Upgraded to Aa3 (sf) and Placed Under Review for Possible Upgrade

Cl. A-4, Upgraded to A1 (sf); previously on Mar 25, 2014 A2 (sf) Placed Under Review for Possible Upgrade

Issuer: National Collegiate Student Loan Trust 2006-1

Lifetime Expected Net Losses: 39.0% of original pool balance plus any loans added subsequently

Cl. A-3, Upgraded to Aa1 (sf); previously on Mar 25, 2014 Upgraded to Aa3 (sf) and Placed Under Review for Possible Upgrade

Cl. A-4, Upgraded to Baa1 (sf); previously on Mar 25, 2014 Ba1 (sf) Placed Under Review for Possible Upgrade

Issuer: National Collegiate Student Loan Trust 2006-2

Lifetime Expected Net Losses: 47.7% of original pool balance plus any loans added subsequently

Cl. A-2, Upgraded to Aa1 (sf); previously on Mar 25, 2014 Upgraded to Aa3 (sf) and Placed Under Review for Possible Upgrade

Cl. A-3, Upgraded to Baa2 (sf); previously on Mar 25, 2014 Ba1 (sf) Placed Under Review for Possible Upgrade

Issuer: National Collegiate Student Loan Trust 2006-3

Lifetime Expected Net Losses: 44.0% of original pool balance plus any loans added subsequently

Cl. A-3, Upgraded to Aa1 (sf); previously on Mar 25, 2014 A1 (sf) Placed Under Review for Possible Upgrade

Cl. A-4, Upgraded to Baa3 (sf); previously on Mar 25, 2014 Ba1 (sf) Placed Under Review for Possible Upgrade

Issuer: National Collegiate Student Loan Trust 2006-4

Lifetime Expected Net Losses: 51.2% of original pool balance plus any loans added subsequently

Cl. A-2, Upgraded to Aa1 (sf); previously on Mar 25, 2014 A1 (sf) Placed Under Review for Possible Upgrade

Cl. A-3, Upgraded to Baa3 (sf); previously on Mar 25, 2014 Ba1 (sf) Placed Under Review for Possible Upgrade

Cl. A-4, Downgraded to Caa2 (sf); previously on Jun 3, 2013 Downgraded to B1 (sf)

Issuer: National Collegiate Student Loan Trust 2007-1

Lifetime Expected Net Losses: 46.9% of original pool balance plus any loans added subsequently

Cl. A-2, Upgraded to Aa1 (sf); previously on Mar 25, 2014 A1 (sf) Placed Under Review for Possible Upgrade

Cl. A-3, Confirmed at Ba2 (sf); previously on Mar 25, 2014 Ba2 (sf) Placed Under Review for Possible Upgrade

Cl. A-4, Downgraded to Caa3 (sf); previously on Jun 3, 2013 Downgraded to Caa2 (sf)

Issuer: National Collegiate Student Loan Trust 2007-2

Lifetime Expected Net Losses: 50.2% of original pool balance plus any loans added subsequently

Cl. A-2, Confirmed at A2 (sf); previously on Mar 25, 2014 A2 (sf) Placed Under Review for Possible Upgrade

Cl. A-3, Confirmed at Baa3 (sf); previously on Mar 25, 2014 Baa3 (sf) Placed Under Review for Possible Upgrade

Cl. A-4, Downgraded to Caa3 (sf); previously on Jun 3, 2013 Downgraded to B1 (sf)

Issuer: National Collegiate Student Loan Trust 2007-3

Lifetime Expected Net Losses: 45.9% of original pool balance plus any loans added subsequently

Cl. A-2-AR-4, Upgraded to A3 (sf); previously on Mar 25, 2014 Baa1 (sf) Placed Under Review for Possible Upgrade

Cl. A-3-AR-2, Downgraded to Caa3 (sf); previously on Jun 3, 2013 Confirmed at Caa2 (sf)

Issuer: National Collegiate Student Loan Trust 2007-4

Lifetime Expected Net Losses: 46.0% of original pool balance plus any loans added subsequently

Cl. A-2-AR-4, Upgraded to A3 (sf); previously on Mar 25, 2014 Baa1 (sf) Placed Under Review for Possible Upgrade

Cl. A-3-AR-2, Downgraded to Caa3 (sf); previously on Jun 3, 2013 Upgraded to Caa2 (sf)

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 receive or take into account a third-party assessment on the due diligence performed regarding the underlying assets or financial instruments related to the monitoring of these transactions in the past six months.

In rating this transaction, Moody's used a cash flow model to model cash flow stress scenarios to determine the extent to which investors would receive timely payments of interest and principal in the stress scenarios, given the transaction structure and collateral composition.

As the section on loss and cash flow analysis describes, 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 rating action on the support provider and in relation to each particular 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 rating action, and whose ratings may change as a result of this 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.

Jinwen Chen
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

Irina Faynzilberg
VP - Sr Credit Officer/Manager
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

Moody's takes rating actions on 27 classes of notes in 14 National Collegiate Student Loan Trust securitizations
No Related Data.
© 2021 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved.

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