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TMCNet:  Fitch Affirms Panhandle-Plains Higher Ed Authority, Inc., Series 2011-2

[August 21, 2014]

Fitch Affirms Panhandle-Plains Higher Ed Authority, Inc., Series 2011-2

NEW YORK --(Business Wire)--

Fitch Ratings affirms the Panhandle-Plains Higher Education Authority, Inc., Series 2011-2 senior notes at 'AAAsf'. The Rating Outlook is Stable.

KEY RATING DRIVERS

High Collateral Quality: Each of the trusts' collateral consists of 100% of 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 reinsurance provided by the U.S. Department of Education (ED) for at least 97% of principal and accrued interest. The current U.S. sovereign rating is 'AAA' with a Stable Outlook.

Sufficient Credit Enhancement: Credit Enhancement (CE) is provided by overcollateralization and excess spread. As of the June 2014 distribution date, senior/total parity is 107.62% (7.08% CE). The trust is in turbo, and excess cash cannot be released from the trust until all the notes are paid-in-full.

Adequate Liquidity Support: Liquidity support is provided by a reserve account where the balance is determined as the greater of 0.25% of the outstanding notes and $904,695.

Acceptable Servicing Capabilities: ACS (News - Alert) Education Services, Inc. (ACS), a subsidiary of the Xerox Corporation, as the servicer, is responsible for the day-to-day servicing of this trust. In Fitch's opinion, ACS is an acceptable servicer of FFELP student loans.

RATING SENSITIVITIES

Since FFELP student loan asset backed securities rely on the U.S. government to reimburse defaults, 'AAAsf' FFELP ABS (News - Alert) 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 and better performance from private student loans could lead to future upgades.


Fitch has affirmed the following ratings:

Panhandle-Plains Higher Education Authority Inc., Series 2011-2:

--Class A-1 note at 'AAAsf'; Outlook Stable;

--Class A-2 note at 'AAAsf'; Outlook Stable;

--Class A-3 note at 'AAAsf'; Outlook Stable.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research:

--'Global Structured Finance Rating Criteria' (May 2014);

--'Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria' (June 2014).

Applicable Criteria and Related Research:

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=708795

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=855834

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON (News - Alert) THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.


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