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Fitch Affirms Senior Notes Issued by Arkansas Student Loan Authority Series 2012-1

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NEW YORK–(BUSINESS WIRE)–

Fitch Ratings has affirmed at ‘AAAsf’ the senior student loan notes issued by Arkansas Student Loan Authority 2012-1.

KEY RATING DRIVERS

High Collateral Quality: The trust collateral is comprised of 100% of Federal Family Education Loan Program (FFELP). 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).

Sufficient Credit Enhancement: Cash flows scenarios for the class A notes were satisfactory under Fitch’s stresses. Total reported parity is 108.22%. Total credit enhancement (CE) is provided by overcollateralization (OC), and excess spread. Additionally, this trust is in turbo and no cash will be released until all notes all paid in full.

Liquidity support is provided by a reserve account (0.25% of outstanding notes or $300,000).

Acceptable Servicing Capabilities: EdFinancial Services is the servicer of this trust, with Nelnet acting as back-up servicer. In Fitch’s opinion, both 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:

Arkansas Student Loan Authority 2012-1:

–Class A at ‘AAAsf’; Outlook Stable.

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

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:

–‘Arkansas Student Loan Authority, Series 2012-1 — Appendix’ (Dec. 11, 2012);

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

Applicable Criteria and Related Research:

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

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

–‘Arkansas Student Loan Authority Series 2012-1 (US ABS)’

(Dec. 11, 2012);

–‘Arkansas Student Loan Authority, Series 2012-1 — Appendix'(Dec. 11, 2012);

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

Applicable Criteria and Related Research:

Arkansas Student Loan Authority, Series 2012-1 — Appendix

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=751127

Representations, Warranties and Enforcement Mechanisms in Global Structured Finance Transactions

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=799248

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=754389

Arkansas Student Loan Authority Series 2012-1 (US ABS)

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=696719

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=941175

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.

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Contact:

Fitch Ratings

Primary Analyst

Victoria Ohorodnyk

Associate Director

+1-212-908-0866

Fitch Ratings, Inc.

33 Whitehall Street

New York, NY 10004

or

Committee Chairperson

Steven Stubbs

Senior Director

+1-212-908-0676

or

Media Relations:

Sandro Scenga, New York, +1 212-908-0278

Email:

sandro.scenga@fitchratings.com

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Fitch Affirms Senior Notes Issued by Arkansas Student Loan Authority Series 2012-1

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