Fitch Ratings assigns the following ratings to two classes of Goal Structured Solutions Trust 2015-1 notes issued by Goal Structured Solutions, LLC, pursuant to a discrete indenture dated January 15, 2015:
--$256,500,000 floating rate student loan asset-backed notes, class A 'AAAsf'; Outlook Stable;
--$4,000,000 floating rate student loan asset-backed notes, class B 'Asf'; Outlook Stable.
KEY RATING DRIVERS
Collateral Quality: The trust collateral consists of 100% rehabilitated 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 at least 97% reinsurance of principal and accrued interest provided by the U.S. Department of Education (ED). Fitch currently rates the U.S. sovereign rating at 'AAA' with a Stable Outlook.
Sufficient Credit Enhancement(CE): CE is provided by $5,245,925 of overcollateralization (OC) and excess spread. The transaction closed with the senior parity at 103.60% and total parity at 102.01%. Cash may be released to the issuer when the target OC, equal to the greater of 2.15% of the adjusted pool balance or $1,000,000, has been reached. Fitch reviewed transaction cash flows that were stressed at a level commensurate with Fitch's 'AAAsf' rating categories for the senior notes and 'Asf' for the subordinate notes, which were satisfactory. In addition, the class A notes benefit from subordination provided by the class B notes.
Adequate Liquidity Support: Liquidity support is initially provided by a $6,481,608 million reserve account (2.50% of the pool balance) funded at closing with note proceeds. There is a target reserve requirement schedule with the final stepdown to 0.10% of the pool balance on 8/25/2016 with a floor of $150,000.
Acceptable Servicing Capabilities: Xerox Education Services, LLC (Xerox-ES) is responsible for the day to day servicing of the portfolio. In Fitch's opinion, Xerox-ES is an acceptable servicer of Rehabilitated 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 CE driven by positive excess spread given favorable basis factor conditions could lead to future upgrades.
Key Rating Drivers and Rating Sensitivities are further described in the new issue report titled 'Goal Structured Solutions Trust 2015-1', dated January 16, 2015, available on www.fitchratings.com.
A comparison of the transaction's Representations, Warranties & Enforcement Mechanisms (RW&Es) to those of typical RW&Es for that asset class is available by accessing the appendix dated Jan. 9, 2014, available on Fitch's website at www.fitchratings.com.
Additional information is available at 'www.fitchratings.com'.
Applicable Criteria and Related Research:
--'Global Structured Finance Rating Criteria' (August 2014);
--'Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria' (June 2014).
Applicable Criteria and Related Research: Goal Structured Solutions Trust 2015-1
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=849628
Global Structured Finance Rating Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=754389
Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=750530
Additional Disclosure
Solicitation Status
http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=972316
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