Approximately $9.9 million of asset-backed securities affected
New York, December 18, 2020 -- Moody's Investors Service, ("Moody's") has
upgraded two tranches from the Access Group, Inc.,
Floating Rate Student Loan Asset-Backed Notes, Series 2001.
The underlying collateral consists of private student loans that were
extended primarily to graduate and professional students.
The complete rating actions are as follows:
Issuer: Access Group, Inc., Federal Student Loan
Asset-Backed Notes, Series 2001
Cl. II A-1 Group II, Upgraded to Aa2; previously
on Dec 19, 2018 Downgraded to A3
Cl. B, Upgraded to Aa3; previously on Oct 8, 2019
Upgraded to Baa1
RATINGS RATIONALE
The rating actions are a result of a continued build-up of credit
enhancement on the bonds. The overcollateralization and subordination
on Class II A-1 has increased by approximately 17% and the
ratio of total assets to senior bonds (senior parity level) has increased
by approximately 38% over the past eighteen months ending October
2020. The overcollateralization and subordination on Class B has
increased by approximately 19% and the ratio of total assets to
total liabilities (total parity level) has increased by approximately
34% over the same time period. Both the classes have benefited
from the rapid deleveraging due to the substantial pay down of the classes
in a pro-rata pay structure.
Moody's expected lifetime default as a percentage of original pool balance
remains unchanged at 17.50%.
The rating actions further reflect the high uncertainty in performance
of the loans in the pools as a result of persisting weak economic conditions
and uncertainty in continued government stimulus support.
The coronavirus outbreak, the government measures put in place to
contain it, and the weak global economic outlook continue to disrupt
economies and credit markets across sectors and regions. Our analysis
has considered the effect on the performance of consumer assets from the
current weak U.S. economic activity and a gradual recovery
for the coming months. Although an economic recovery is underway,
it is tenuous and its continuation will be closely tied to containment
of the virus. As a result, the degree of uncertainty around
our forecasts is unusually high.
We regard the coronavirus outbreak as a social risk under our ESG framework,
given the substantial implications for public health and safety.
PRINCIPAL METHODOLOGY
The principal methodology used in these ratings was "Moody's Approach
to Rating US Private Student Loan-Backed Securities" published
in November 2020 and available at https://www.moodys.com/viewresearchdoc.aspx?docid=PBC_1248885.
Alternatively, please see the Rating Methodologies page on www.moodys.com
for a copy of this methodology.
Factors that would lead to an upgrade or downgrade of the ratings:
Up
Moody's could upgrade the notes if, given our expectations of portfolio
losses, levels of credit enhancement are consistent with higher
ratings. Among the factors that could drive the ratings up are
increasing voluntary prepayment rates, and lower net losses on the
underlying loan pool than Moody's expectation.
Down
Moody's could downgrade the notes if, given our expectations of
portfolio losses, levels of credit enhancement are consistent with
lower ratings. Among the factors that could drive the ratings down
are continued low levels of voluntary prepayments, and higher net
losses on the underlying loan pools than Moody's expectation.
REGULATORY DISCLOSURES
For further specification of Moody's key rating assumptions and
sensitivity analysis, see the sections Methodology Assumptions and
Sensitivity to Assumptions in the disclosure form. Moody's
Rating Symbols and Definitions can be found at: https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_79004.
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.
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, category/class of
debt or security this announcement provides certain regulatory disclosures
in relation to each rating of a subsequently issued bond or note of the
same series, category/class of debt, security 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.
The ratings have been disclosed to the rated entity or its designated
agent(s) and issued with no amendment resulting from that disclosure.
These ratings are solicited. Please refer to Moody's Policy
for Designating and Assigning Unsolicited Credit Ratings available on
its website www.moodys.com.
Regulatory disclosures contained in this press release apply to the credit
rating and, if applicable, the related rating outlook or rating
review.
Moody's general principles for assessing environmental, social
and governance (ESG) risks in our credit analysis can be found at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1243406.
At least one ESG consideration was material to the credit rating action(s)
announced and described above.
The Global Scale Credit Rating on this Credit Rating Announcement was
issued by one of Moody's affiliates outside the EU and is endorsed
by Moody's Deutschland GmbH, An der Welle 5, Frankfurt
am Main 60322, Germany, in accordance with Art.4 paragraph
3 of the Regulation (EC) No 1060/2009 on Credit Rating Agencies.
Further information on the EU endorsement status and on the Moody's
office that issued the credit rating is available on www.moodys.com.
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.
Prachi Talathi
Associate Lead Analyst
Structured Finance Group
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653
Deepika Kothari
Senior Vice President
Structured Finance Group
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653
Releasing Office:
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653
