Fitch Affirms Higher Education Loan Authority of the State of Missouri Ser 2009-1 & 2010-1 Trusts

Business Wire

NEW YORK--(BUSINESS WIRE)--

Fitch Ratings has affirmed at 'AAAsf' both senior notes issued by Higher Education Loan Authority of the State of Missouri, series 2009-1 and Higher Education Loan Authority of the State of Missouri, series 2010-1.

Fitch used its 'Global Structured Finance Rating Criteria' and 'Rating U.S. Federal Family Education Loan Program Student Loan ABS' to review the ratings.

KEY RATING DRIVERS

High Collateral Quality: The trust collateral consists of Federal Family Education Loan Program (FFELP) loans with guaranties provided by eligible guarantors and reinsurance provided by the U.S. Department of Education (ED) for at least 97% of principal and accrued interest.

Sufficient Credit Enhancement: In Fitch's analysis, the notes passed the cash flows corresponding to their rating stresses. The notes will benefit from overcollateralization and future excess spread. Series 2009-1 trust's total parity has been steadily increasing. Current reported total parity is 110.19% as of July 2013. For series 2010-1, total parity has been stable at release level of 110% as of July 2013.

Satisfactory Servicing Capabilities: Higher Education Loan Authority of the State of Missouri and Pennsylvania Higher Education Assistance Agency are responsible for servicing the two trusts. Fitch believes that they are both acceptable servicers of FFELP student loans.

Negative Rating Outlooks Assigned: Fitch's Rating Outlook for all existing and new issuances of 'AAAsf' rated tranches of FFELP securitizations remains Negative, which reflects Fitch's Negative Rating Outlook on the long-term foreign and local currency issuer default ratings of the U.S.

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 affirmed the following ratings:

Higher Education Loan Authority of the State of Missouri, Series 2009-1:

--Class A1 at 'AAAsf'; Outlook Negative;
--Class A2 at 'AAAsf'; Outlook Negative.

Higher Education Loan Authority of the State of Missouri, Series 2010-1:
--Class A at 'AAAsf'; Outlook Negative.

Additional information is available at www.fitchratings.com.

Applicable Criteria and Related Research:
--'Global Structured Finance Rating Criteria' (May 24, 2013);
--'Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria' (May 17, 2013).

Applicable Criteria and Related Research:
Global Structured Finance Rating Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=708661
Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria - Effective Apr. 7, 2011 to Apr. 3, 2012
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=616766

Additional Disclosure
Solicitation Status
http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=803345
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Contact:
Fitch Ratings
Primary Analyst:
Paul Jiang, +1-212-908-9120
Analyst
Fitch Ratings, Inc.
One State Street Plaza
New York, NY 10004
or
Committee Chairperson:
Tracy Wan, +1-212-908-9171
Senior Director
or
Media Relations:
Brian Bertsch, +1-212-908-0549
brian.bertsch@fitchratings.com
Elizabeth Fogerty, +1-212-908-0526
elizabeth.fogerty@fitchratings.com
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