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Fitch Affirms Nelnet Student Loan Trust 2013-5 Notes

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NEW YORK–(BUSINESS WIRE)–

Fitch Ratings has affirmed the senior notes for Nelnet Student Loan Trust 2013-5 at ‘AAAsf’ and subordinate note at ‘Asf’. The Rating Outlook remains Stable for all classes.

KEY RATING DRIVERS

High Collateral Quality: The trust collateral is comprised of 100% of 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 reinsurance provided by the U.S. Department of Education (ED) for at least 97% of principal and accrued interest. Fitch currently rates the U.S. sovereign at ‘AAA’ with a Stable Outlook.

Sufficient Credit Enhancement: While both the senior and subordinate notes will benefit from over-collateralization and future excess spread, the senior notes also benefit from subordination provided by the class B note. As of July 2014, total parity is 101.52% and senior parity is 104.01%. The trust has been releasing cash given the Specified Overcollateralization Amount of the greater of 1.5% of the adjusted pool balance and $2,000,000 is maintained.

Adequate Liquidity Support: Liquidity support is provided by a reserve account. The reserve is sized equal to the greater of 0.25% of the pool balance, and $408,000 and an $ 8.0 million capitalized interest account.

Acceptable Servicing Capabilities: Day-to-day servicing is provided by Nelnet, Pennsylvania Higher Education Assistance Agency (PHEAA), Xerox Education Services Inc. (XES). In Fitch’s opinion, all servicers are acceptable servicers of 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 credit enhancement driven by positive excess spread given favorable basis factor conditions could lead to future upgrades.

Fitch has affirmed the following:

Nelnet Student Loan Trust Series 2013-5:

–Class A at ‘AAAsf’; Outlook Stable;

–Class B at ‘Asf’; Outlook Stable.

A comparison of the transaction’s RW&Es to those of typical RW&Es for student loans is available by accessing the reports and links below:

–Nelnet Student Loan Trust 2013-5 – Appendix’, dated Sept. 24, 2013;

–‘Representations, Warranties, and Enforcement Mechanisms in Global Structured Finance Transactions — Amended’, dated April 17, 2012.

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

Applicable Criteria and Related Research:

–‘Global Structured Finance Rating Criteria’ (May 20, 2014);

–‘Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria’ (June 23, 2014).

–‘Nelnet Student Loan Trust 2013-5 – Appendix’ (Sept. 24, 2013);

–‘Representations, Warranties, and Enforcement Mechanisms in Global Structured Finance Transactions — Amended’ (April 17, 2012).

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

Nelnet Student Loan Trust 2013-5 — Appendix

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=718682

Representations, Warranties, and Enforcement Mechanisms in Global Structured Finance Transactions

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=676496

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=877314

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 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.

Security Upgrades & DowngradesFinanceFitch RatingsNelnet
Contact:

Fitch Ratings

Primary Analyst

Lisette Figueroa

Analyst

+1-212-908-0836

Fitch Ratings, Inc.

33 Whitehall St.

New York, NY 10004

or

Committee Chairperson

Steve Stubbs

Senior Director

+1-212-908-0676

or

Media Relations

New York:

Sandro Scenga, +1 212-908-0278

sandro.scenga@fitchratings.com

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Fitch Affirms Nelnet Student Loan Trust 2013-5 Notes

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