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Fitch Affirms Iowa Student Loan Liquidity Corporation, Series 2011-1 Notes

NEW YORK–(BUSINESS WIRE)–

Fitch Ratings affirms the Iowa Student Loan Liquidity Corporation 2011-1 (ISL 2011-1) class A notes at ‘AAAsf’ with a Stable Rating Outlook.

KEY RATING DRIVERS

High Collateral Quality:

The 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.

Sufficient Credit Enhancement:

The ISL 2011-1 notes benefit from overcollateralization (OC; the excess of trust’s asset balance over bond balance) and excess spread. As of June 2014, the trust’s parity is 118.92% (15.91% CE). The trust is in turbo, and cash cannot be released from the trust until the ISL 2011-1 notes have been paid in full.

Adequate Liquidity Support:

Liquidity support is provided by a Debt Service Reserve Fund sized at the greater of 0.25% of the pool balance and 0.15% of the initial pool balance.

Acceptable Servicing Capabilities:

Aspire Resources, Inc., a wholly-owned subsidiary and servicing division of ISL, is responsible for day-to-day servicing of the trust. American Education Services (AES), a servicing division of Pennsylvania Higher Education Assistance Agency (PHEAA) will act as backup servicer for the trust. Although Aspire Resources, Inc. and AES are not rated by Fitch, Fitch believes they 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.

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

Applicable Criteria and Related Research:

–‘Global Structured Finance Rating Criteria’, dated Aug. 4, 2014;

–‘Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria’, dated June 23, 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=893814

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 RatingsFFELP
Contact:

Fitch Ratings

Primary Analyst

Jeffrey Prackup

Director

+1-212-908-0839

Fitch Ratings, Inc.

33 Whitehall Street

New York, NY 10004

or

Secondary Analyst

Paul Jiang

Analyst

+1-212-908-9120

or

Committee Chairperson

Tracy Wan

Senior Director

+1-212-908-9171

or

Media Relations

Sandro Scenga, +1 212-908-0278

sandro.scenga@fitchratings.com

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Fitch Affirms Iowa Student Loan Liquidity Corporation, Series 2011-1 Notes

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