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Greece taps public sector cash to help cover March needs

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Greece taps public sector cash to help cover March needs
Greece is tapping into the cash reserves of pension funds and public sector entities through repo transactions as it scrambles to cover its funding needs this month, debt officials told Reuters on Tuesday.Shut out of debt markets and with aid from lenders frozen, Athens is in danger of running out of cash in the coming weeks as it faces a 1.5 billion euro loan repayment to the International Monetary Fund this month.The government has sought to calm fears and says it will be able to make the IMF payment and others, but not said how.At least part of the states cash needs for the month will be met by repo transactions in which pension funds and other state entities sitting on cash lend the money to the countrys debt agency through a short-term repurchase agreement for up to 15 days, debt agency officials told Reuters.However, one government official said they could not be used to repay the IMF unless Athens was able to repay the state entities the cash it borrowed from them.Debt officials sought to play the repos as advantageous for both sides, arguing that the funds get a better return on their cash than what is available in the interbank market.”It is not something new, its a tactic that started more than a year ago and is a win-win solution. Its a proposal, we are not twisting anyones arm,” one official said.In such repo transactions, a pension fund or government entity parks cash it does not immediately need at an account at the Bank of Greece, which becomes the counterparty in the deal with the debt agency.The money is lent to the debt agency for one to 15 days against collateral – mostly Greek treasury paper held in its portfolio – and is paid back with interest at expiry.The lender can always opt to roll over the repurchase agreement and continue to earn a higher return than what is available in the interbank market.One source familiar with the matter has previously said Athens could raise up to 3 billion euros through such repos, but that it was not clear how much of that had already been used up by the government.”There is a sum that has already been raised this way,” the debt official said without disclosing specific numbers.Athens – which has monthly needs of about 4.5 billion euros including a wage and pension bill of 1.5 billion euros – is running out of options to fund itself despite striking a deal with the euro zone to extend its bailout by four months.Faced with a steep fall in revenues, it is expected to run out of cash by the end of March, possibly sooner, though the government is trying to assure creditors it will not default.”We are confident that the repayments will be made in full, particularly to the IMF, and there will be liquidity to get us through the end of the four-month period,” Finance Minister Yanis Varoufakis said during a late-night talk show on Greek TV on Monday. “March is sorted.” [Reuters]
[…]

Fitch Rates KHESLC 2015-1

NEW YORK–(BUSINESS WIRE)–

Fitch Ratings assigns the following rating to the Kentucky Higher Education Student Loan Corporation series 2015-1 (KHESLC 2015-1) student loan asset-backed notes:

–$134,605,000 2015-1 notes ‘AAAsf’; Outlook Stable.

KEY RATING DRIVERS

High Collateral Quality: The trust collateral consists of Federal Family Education Loan Program (FFELP) loans, including approximately 50.2% of rehab 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: Cash flow scenarios for class A notes were satisfactory under Fitch stresses. At closing, total parity is expected to be 104.0%. Total credit enhancement (CE) is provided by overcollateralization (OC) and excess spread.

Adequate Liquidity Support: Liquidity support for the 2015-1 notes is provided by a $336,513 reserve fund and a $3.5 million capitalized interest account both of which will be funded with note proceeds at closing.

Acceptable Servicing Capabilities: KHESLC will service the entire 2015-1 portfolio, and Nelnet Servicing LLC will be the backup servicer. Fitch believes that 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. For further discussion of Fitch’s sensitivity analysis, please see the presale titled ‘KHESLC 2015-1’, dated Feb. 5, 2015.

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

Applicable Criteria and Related Research:

–‘Global Structured Finance Rating Criteria’ (August 2014);

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

–‘Representations, Warranties and Enforcement Mechanism in Global Structure Finance Transactions’ (October 2014).

Applicable Criteria and Related Research:

Representations, Warranties and Enforcement Mechanisms in Global Structured Finance Transactions

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

Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=750530

Global Structured Finance Rating Criteria

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

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=980439

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.

FinanceInvestment & Company InformationFitch Ratingsstudent loan Contact:

Fitch Ratings

Primary Analyst

Nicole Edwards, +1-212-908-9114

Director

Fitch Ratings, Inc.

33 Whitehall

New York, NY 10004

or

Secondary Analyst

Harry Kohl, +1-212-908-0837

Associate Director

or

Committee Chairperson

Tracy Wan, +1-212-908-9171

Senior Director

or

Media Relations

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

sandro.scenga@fitchratings.com […]

Fitch Rates Navient Student Loan Trust 2015-1

NEW YORK–(BUSINESS WIRE)–

Fitch Ratings assigns ratings to Navient Student Loan Trust 2015-1 as follows:

–$343,600,000 class A-1 notes ‘AAAsf’; Outlook Stable;

–$629,700,000 class A-2 notes ‘AAAsf’; Outlook Stable;

–$26,700,000 class B notes ‘A+sf’; Outlook Stable.

KEY RATING DRIVERS

High Collateral Quality: The trust collateral consists of Federal Family Education Loan Program (FFELP) loans, including approximately 15.1% of rehab 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. Fitch currently rates the U.S. at ‘AAA’/Stable.

Sufficient Credit Enhancement: Cash flow scenarios for the class A and B notes were satisfactory under Fitch’s ‘AAAsf’ and ‘A+sf’ stresses, respectively. Credit enhancement (CE) is provided by overcollateralization (OC), excess spread and, for the class A notes, approximately 2.67% of subordination provided by the class B notes. A target OC amount equal to the greater of 1.50% of the adjusted pool balance and $3.0 million must be met before excess cash can be released.

Adequate Liquidity Support: Liquidity support is provided by a reserve account sized at 1.65% of the initial student loan balance which is funded at closing. The required reserve account balance for any distribution dates prior to May 25, 2016 (the step-down date) is 1.65% of the current student loan balance. Thereafter, the requirement will be the greater of 0.25% of the current student loan balance and 0.10% of the initial student loan balance.

Acceptable Servicing Capabilities: Navient Solutions, Inc. (formerly known as Sallie Mae, Inc.) will service 100% of the trust’s student loan pool. In Fitch’s opinion, Navient Solutions, Inc. is an acceptable servicer 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 CE driven by positive excess spread given favorable basis factor conditions could lead to future upgrades.

Key Rating Drivers and Rating Sensitivities are further described in the pre-sale report titled ‘Navient Student Loan Trust 2015-1’, and for a further discussion on the representations, warranties, and enforcement mechanisms available to investors in this transaction, please see the related presale appendix, dated Feb. 12, 2015, available on www.fitchratings.com, or by clicking on the link.

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

Applicable Criteria and Related Research:

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

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

–‘Representations, Warranties, and Enforcement Mechanisms in Global Structured Finance Transactions’ (October, 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=750530

Representations, Warranties and Enforcement Mechanisms in Global Structured Finance Transactions

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

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=980410

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.

FinanceFinancial AidFitch Ratingsstudent loan Contact:

Fitch Ratings

Primary Analyst

Nicole Edwards

Director

+1 212-908-9114

Fitch Ratings, Inc.

33 Whitehall Street

New York, NY 10004

or

Secondary Analyst

Victoria Ohorodnyk

Director

+1 212-908-0866

or

Committee Chairperson

Tracy Wan

Senior Director

+1 212-908-9171

or

Media Relations:

Sandro Scenga, +1 212-908-0278

sandro.scenga@fitchratings.com […]

Dangers of applying for an online payday loan

As consumers move their financial activities online, applying online for a payday loan may seem like the natural thing for a cash-strapped person to do.

But you could be setting yourself up for a world of hurt, from paying exorbitant interest rates to having funds swiped from your bank account to being threatened by debt collectors. Just filling out an application could be enough to begin the harassment and thievery.

“Absolutely the worst thing you can do is apply for an online payday loan,” says Jay Speer, executive director of the Virginia Poverty Law Center.

Most online payday loan sites aren’t even operated by lenders. They’re run by “lead generators,” who seek your personal information, such as Social Security number, driver’s license number and bank account details. They then sell that information to lenders.

“Your email and telephone explode after that,” Speer says, as lenders vie to offer you cash. That can happen even if you live in one of the 15 states where payday loans are illegal.

Lenders aren’t the only ones in the market for your personal information. “There’s a good chance they sell to fraudsters — people who come after you months or years later,” he says.

Sandra Green (not her real name) has experienced this firsthand. The Virginia woman turned to online payday loans after her husband was injured and couldn’t work for two years. Their credit was damaged and they couldn’t get cash to pay their bills from traditional financial institutions.

Green took out several loans totaling $3,000 to $4,000 starting around 2010. The lenders that she received cash from took their payments from her bank account — but they weren’t the only ones. A company she had never heard of swiped money from her account, creating an overdraft.

She filled out a request for the bank to stop payment. That worked for about six months, and then the withdrawals started again. “People will change the identity of the company and then they’ll hit it (the account) again. Once they do this it’s a never-ending cycle,” she says.

Companies she’d never done business with would call her at work and at home, harassing her. One threatened to file papers with the local sheriff’s office if she didn’t pay immediately.

“They get really belligerent when you don’t do what they want you to do,” Green recalls.

She feared she’d wind up in bankruptcy because of the loans and finally sought help from Blue Ridge Legal Services, a Virginia legal aid society, in 2013. Blue Ridge connected her with the Virginia Poverty Law Center.

Speer says of online payday lenders: “These people are like sharks. If you give them some money it’s like throwing blood in the water.”

Payday loans are generally described as small, short-term loans. A consumer writes a check for the amount borrowed, plus a fee. The lender advances money against the check and the check is held until the next payday, when the loan and fees must be paid. Or, in the practice used by most online lenders, a consumer can grant the lender access to his bank account, and the lender electronically accesses the account to deposit money and withdraw payment.

Even paying back legitimate loans carries astronomical costs. Green took out a loan of $350. It took six weeks for her to pay it back, and she paid nearly $300 in fees.

Online payday loans boom
Her experiences are not uncommon. “Fraud and Abuse Online: Harmful Practices in Internet Payday Lending,” a 2014 study by the Pew Charitable Trusts, found online installment payday loans typically have an APR of 300 percent to more than 700 percent. Online lump-sum payday loans have a typical APR of 650 percent, or $25 per $100 borrowed per pay period. Exorbitant fees are also charged, and initial payments might not be applied to the loan’s principal.

Online payday lending is big business. Revenue tripled from $1.4 billion in 2006 to $4.1 billion, according to Pew.

Of the more than 250 online payday borrowers surveyed by Pew, almost 40 percent said their personal information was sold to a third party without their knowledge. Nearly one-third had an unauthorized withdrawal from their account.

Threats were common, with 30 percent of those surveyed saying they were threatened by an online lender or debt collector.

“Harassment and fraud are really concentrated in the online lending market,” says Nick Bourke, project director for Pew’s study on payday loans.

Part of the problem stems from the fact that there’s no control over who can get your information once you apply for an online payday loan. “People’s personal information can be spread far and wide,” Bourke says.

Even if the loans are fraudulent, a consumer’s failure to pay them may be reported to one of the three main credit bureaus, Speer says, which can impact a consumer’s ability to rent an apartment or land a job.

Many storefront payday lenders are fed up with the behavior of these online payday lenders.

“These unlawful lenders roam the Internet trolling for customers. They are scammers. They are fraudsters,” says Amy Cantu, spokeswoman for the Community Financial Services Association of America, which represents more than half of the country’s storefront payday lenders.

Though online payday lenders represent just one-third of the marketplace, 90 percent of payday lending complaints filed with the Better Business Bureau are aimed at them, according to Pew.

Self-regulation efforts
Association members vow to adhere to the organization’s best practices, which include complying with state and federal laws, being licensed in each state in which they do business and adhering to acceptable debt collection practices.

Some of the association’s larger members also have an online presence, she says, but those sites also adhere to the organization’s best practices.

Cantu says she understands that consumers with financial troubles may prefer the anonymity of the Internet when seeking cash, rather than walking into a storefront payday lender. But online lenders are supposed to only operate in the states that allow payday lending.

Her organization wants the federal consumer watchdog agency, the Consumer Financial Protection Bureau, to crack down on illegal lenders.

Agencies crack down
Already the CFPB and the Federal Trade Commission are stepping up action against fraudsters. In a joint news conference in September, the agencies announced they’d filed suit against two online payday lenders.

The CFPB sued Kansas City-based Hydra Group, while the FTC sued CWB Services, also based in Kansas City.

The CFPB received more than 1,300 consumer complaints about the Hydra Group.

At the news conference, CFBP Director Richard Cordray accused the Hydra Group of “running an illegal cash-grab scam to force purported loans on people without their prior consent. It is an incredibly brazen and deceptive scheme.”

Both the Hydra Group and CWB Services were accused of buying personal information, including bank account numbers, from lead generators. The companies would deposit money into consumers’ bank accounts without any signed agreements, and then make unauthorized withdrawals from the accounts. If a consumer complained, the companies would produce false loan documents.

In 15 months, the Hydra Group made $97.3 million in loans and collected $115.4 million from consumers.

Even if consumers closed their accounts, their information might have been sold to debt collectors, who then attempted to collect more money.

A federal judge temporarily shut down the Hydra Group, freezing its assets. The CFPB is requesting a permanent shutdown, along with penalties imposed upon the company and refunds made to consumers.

With CWB Services, the federal court froze the company’s assets and appointed a receivership and the FTC is requesting consumers’ money be refunded. The company had raked in $46 million in 11 months, said Jessica Rich, the FTC’s director of the Bureau of Consumer Protection.

Bourke says the CFPB should ensure that small loans are tailored to the borrower’s ability to pay them off and should provide more protection to consumers, particularly against illegal debt collection practices.

“The core of the problem is that payday loans don’t help people. They drive people further into debt and distress,” he says.

See related:Know your credit card fraudster

,

Know your rights under the Truth in Lending Act

,

New protections from financial ‘gotchas’ in 2015Dangers of applying for an online payday loanCFPB orders refunds for 98,000 subprime cardholdersFighting back against the growing threat of tax fraudFinanceLoanspayday loanbank account […]

Fitch to Rate Navient Student Loan Trust 2015-1; Presale Issued

NEW YORK–(BUSINESS WIRE)–

Fitch Ratings expects to rate Navient Student Loan Trust 2015-1 as follows:

–$257,400,000 class A-1 notes ‘AAAsf(exp)’; Outlook Stable;

–$472,600,000 class A-2 notes ‘AAAsf(exp)’; Outlook Stable;

–$20,000,000 class B notes ‘A+sf(exp)’; Outlook Stable.

Key Rating Drivers

High Collateral Quality: The trust collateral consists of Federal Family Education Loan Program (FFELP) loans, including approximately 15.1% of rehab 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. Fitch currently rates the U.S. at ‘AAA’/Stable Outlook.

Sufficient Credit Enhancement: Cash flow scenarios for the class A and B notes were satisfactory under Fitch’s ‘AAAsf’ and ‘A+sf’ stresses, respectively. Credit enhancement (CE) is provided by overcollateralization (OC), excess spread and, for the class A notes, approximately 2.67% of subordination provided by the class B notes. A target OC amount equal to the greater of 1.50% of the adjusted pool balance and $3 million must be met before excess cash can be released.

Adequate Liquidity Support: Liquidity support is provided by a reserve account sized at 1.65% of the initial student loan balance which is funded at closing. The required reserve account balance for any distribution dates prior to May 25, 2016 (the step-down date) is 1.65% of the current student loan balance. Thereafter, the requirement will be the greater of 0.25% of the current student loan balance and 0.10% of the initial student loan balance.

Acceptable Servicing Capabilities: Navient Solutions, Inc. (formerly known as Sallie Mae, Inc.) will service 100% of the trust’s student loan pool. In Fitch’s opinion, Navient Solutions, Inc. is an acceptable servicer 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 CE driven by positive excess spread given favorable basis factor conditions could lead to future upgrades.

Key Rating Drivers and Rating Sensitivities are further described in the pre-sale report titled ‘Navient Student Loan Trust 2015-1’, and for a further discussion on the representations, warranties, and enforcement mechanisms available to investors in this transaction, please see the related presale appendix, dated Feb. 12, 2015, available on www.fitchratings.com, or by clicking on the link.

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

Applicable Criteria and Related Research:

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

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

–‘Representations, Warranties, and Enforcement Mechanisms in Global Structured Finance Transactions’ (October, 2014).

Applicable Criteria and Related Research: Navient Student Loan Trust 2015-1 (US ABS)

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=861944

Representations, Warranties and Enforcement Mechanisms in Global Structured Finance Transactions

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

Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=750530

Global Structured Finance Rating Criteria

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

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=979603

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 Ratingsstudent loan Contact:

Fitch Ratings

Primary Analyst

Nicole Edwards

Director

+1-212-908-9114

Fitch Ratings, Inc.

33 Whitehall Street

New York, NY 10004

or

Secondary Analyst

Victoria Ohorodnyk

Director

+1-212-908-0866

or

Committee Chairperson

Tracy Wan

Senior Director

+1-212-908-9171

or

Media Relations:

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

Email:

sandro.scenga@fitchratings.com […]

7 Ways to Build Your Credit Score Without a Credit Card

Unless you have a ton of cash at your disposal, you’ll probably need credit at some point in your life. Whether you’re buying a home, car or big-ticket luxury item, the first thing that most lenders typically look at is your credit score.

If you have limited or no credit history, you’ll need to begin building your credit and boost your score before you apply for a major loan. Unfortunately, many believe that opening and using a credit card is the only way to go.

Here are a few alternatives to help raise your credit scores without the magic plastic:

1. Ask companies to report on your behalf

Do you have any recurring bills that you pay on a monthly basis, such as rent, utilities, cable or a cellphone? Try giving the providers a call and request that they report your account activity to the three major credit bureaus, TransUnion, Experian and Equifax.

Do this only if you have responsible payment habits, as payment history accounts for 35 percent of your credit scores and can have a significant impact if there is not a lot of other data in your credit reports.

Also, bear in mind that these companies are not obligated to report to the bureaus, and your request is simply a favor that they have the right to deny.

2. Become an authorized user on another credit card

Of course, there are pros and cons to becoming an authorized user. If the cardholder has a strong credit background, two thumbs up for you because signing on as an authorized user will enable their stellar behavior to improve your credit profile somewhat (perhaps not as much as you think). But, if things are the other way around, your credit scores could take a hit.

Either way, if you opt in and have a change of heart, the information will quickly vanish from your credit file when you request to be removed from the account.

3. Open an account with a credit union and take out a small personal loan

Some credit unions have restricted membership and limited accessibility, but credit unions generally offer financing options at lower interest rates than traditional banks. To give your credit score a boost, apply for a small personal loan.

If your request is denied, inquire about a secured loan in which your money, say, a certificate of deposit or savings account, will be used as collateral. The request will more than likely be approved because the risk to the institution is minimal. And you may have to pay a tad bit of interest, but the rate usually beats what’s available in the credit card world.

4. Apply for an installment loan

Installment loans paid in a timely manner over an extended period of time build your credit scores because they show creditors that you are a responsible borrower. The types of credit in your file make up only 10 percent of your score, but the impact has the potential to be greater if the information in your credit reports is limited.

Retailers sometimes offer promotional installment loans to customers with little to no introductory interest for a limited period of time. If you have the cash on hand, it may not be a bad idea to take this route. But be sure that you have the total sum of cash available upfront to make timely payments and eliminate the balance before the interest kicks in.

5. If you’re a student, take out a federal student loan

A credit check is not required to obtain a federal student loan. All you need to do is fill out the Free Application for Federal Student Aid (FAFSA), and you’re all set. Since it is an installment loan, it can help boost your credit score.

But don’t get the loan and blow through the money. Instead, aim for one that is subsidized and deposit the money into a safe interest-bearing account so the funds will be available when repayment starts.

6. Research peer-to-peer loans

Companies such as Prosper and Lending Club offer peer-to-peer loans in an environment where borrowers are connected with individual investors. The interest rates are usually lower than those of traditional financial institutions. And the lenders are eager to loan unsecured funds because the return they derive is competitive with other investments. (See “4 Things to Know About Peer Lending.”)

Most of the peer-to-peer lenders report to the major credit bureaus.

7. Try an alternative credit score

By reporting your payment history to an alternative to the big three credit bureaus, you can create a nontraditional credit score. Check out a service like Payment Reporting Builds Credit, known as PRBC, to learn more about how an alternative credit score service works.

Do you know of any other ways to improve your credit score without using a credit card? Feel free to share it in the comments below or on our Facebook page.

For more tips on raising your score, watch this video by finance expert Stacy Johnson:

Watch the video of ‘7 Ways to Build Your Credit Score Without a Credit Card’ on MoneyTalksNews.com.

This article was originally published on MoneyTalksNews.com as ‘7 Ways to Build Your Credit Score Without a Credit Card’.

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Keeping money in one place a key to getting a mortgage

By Scott Sheldon January 30, 2015 12:00 am

Keeping your money in one place is vital to a mortgage transaction.

Cash to close and savings post closing escrow become critically important to sealing the deal. I’ll detail what you need to know if you’ve been moving money around and are applying for a mortgage.

It’s an issue for banks

Moving money around in different accounts may raise concerns for suspicious activity with home mortgage banks. Lenders these days must be able to document the paper of funds on each and every loan made. While 99.9 percent of mortgage borrowers are simply moving money from one bank account to another for various convenience reasons, they are at the same time creating a red flag when the origin of the funds cannot be substantiated.

When you move money around, the lender has to document each account the money passes through.

Picture yourself having a standard checking account that does not contain significant assets but is used for your monthly accounting of bills and expenses, and you took the money for your down payment to purchase a home from another account and moved this money into your checking account while continuing to pay bills.

It could appear to the mortgage lender, like you, are spending part of your down payment creating a cash to close roadblock. A better solution? Keep the money in the same place. Transfer the money when needed, sending directly to escrow on your loan transaction, simplifying the details.

Create a paper trail

To best avoid lending conditions surrounding money movement, be prepared to show the full statements of the monies leaving each account. It is customary within mortgage lending to provide two months of statements for each account needed for cash to close escrow and/or for savings required after the fact as a safety cushion. This paper trail must appear to the naked eye that the money begins in one account, goes to another and ends up at close of escrow.

As long as the paper trail is clear and conspicuous, the lender should have no concerns with these monies as long as the funds can be supported. The same goes for gift funds; gift monies will also need a clear paper trail. The same requirements that come into play maybe needed for that safety cushion incumbent of your loan program.

For example:

• Conventional loans: Two months mortgage payments needed in the bank in most cases financing a primary home, six months of mortgage payments for investment homes for all properties owned.

• FHA loans: No reserve requirement.

• VA loans: no reserve requirement.

• Jumbo loan: Varies by lender; generally at least six months mortgage payments in assets needed post closing escrow.

*If you plan to use a bank statement in conjunction for obtaining a mortgage that shows a history of money movement, including money transfers and other various accounts and/or additional monies being deposited independent of your income, you’re going to have some homework to do.

Other considerations include:

• Joint bank accounts: If you’ve been moving money out of an account with another party whose name is on the account but is not a party to the mortgage transaction, the lender is going to request a letter from this other individual stating you have 100 percent access to those funds.

• Cash deposits: Placing cash deposits in your bank account independent of your normal income, i.e., your normal job, can be problematic for getting a mortgage because these monies cannot be identified as to the origin of where they come from raising possible suspicious activity concerns even though they can be legitimate deposits-like freelancing or side jobs. Lenders want to see at least two months of mortgage statements without cash deposits and without large movements of money otherwise, expect these transfer and deposits to be identified, questioned and documented.

While these requirements can be somewhat of a nuisance making the prospect of getting a mortgage somewhat unpleasant, it is also a byproduct of the quality of loans being made in the market today, fully documenting improving everything leaving no stone unturned further substantiating a mortgage borrower’s ability to qualify.

As such, these credit requirements help ensure there is little risk to buying a home or taking on a mortgage you cannot afford.

Scott Sheldon is a local mortgage lender, with a decade of experience helping consumers purchase and refinance primary homes second homes and investment properties. Learn more at www.sonomacountymortgages.com.

[…]

The Mortgage Mistake You May Not Realize You're Making

It’s no secret you need cash on hand to get a mortgage, but you may not know that the way you handle that cash as you apply for a loan can seriously derail your homeownership chances.

Keeping your money in one place is vital to a mortgage transaction. Cash to close and savings after closing escrow are critically important to sealing the deal. Here is what you need to know if you’ve been moving money around and are applying for a mortgage.

It’s an Issue for Banks

Moving money around in different accounts may raise concerns for suspicious activity with mortgage lenders. Lenders these days must be able to document the paper of funds on each and every loan made. While 99.9% of mortgage borrowers are simply moving money from one bank account to another for various convenience reasons, they’re creating a red flag for lenders when the origin of the funds cannot be substantiated.

When you move money around, the lender has to document each account the money passes through. Let’s use an example. You have a standard checking account that does not contain significant assets, but it’s used for your monthly accounting of bills and expenses. If you moved the money for your down payment into your checking account from your savings account while continuing to pay bills, it could appear to the mortgage lender like you are spending part of your down payment, creating a cash to close roadblock. A better solution? Keep the money in the same place. Transfer the money when needed, sending it directly to escrow on your loan transaction, simplifying the paper trail.

Create a Paper Trail

To best avoid lending condition surrounding money movement, be prepared to show the full statements of the monies leaving each account. It is customary within mortgage lending to provide two months of statements for each account needed for cash to close escrow and/or for savings required after-the-fact as a safety cushion. This paper trail must appear to the naked eye that the money begins in one account, goes to another, and ends up at close of escrow. As long as the paper trails is clear and conspicuous, the lender should have no concerns with these monies so long as the funds can be supported. The same goes for gift funds. Gift monies will also need a clear paper trail. The same requirements that come into play may be needed for that safety cushion, depending on your loan program.

Here’s a quick guide to typical requirements for “safety net” funds your lender may require:

Conventional Loans: Two months of mortgage payments needed in the bank in most cases if you’re financing a primary home. You’ll need six months of mortgage payments for investment homes for all properties owned.FHA Loans: No reserve requirementVA Loans: No reserve requirementJumbo Loan: Requirements vary by lender, but you will generally need at least six months of mortgage payments in assets after closing escrow.

The bottom line: If you plan to use a bank statement that shows a history of money movement, including money transfers and other various accounts and/or additional monies being deposited independent of your income, you’re going to have some homework to do.

Just because you have a paper trail doesn’t mean you’re home free yet. If you have a joint bank account or have cash outside of your normal income that’s entering your account, you have a few more steps to satisfy lenders. Here are the details.

Joint Bank Accounts

If you’ve been moving money in and out of a joint bank account with another party who is not a party to the mortgage transaction, the lender is going to request a letter from this other individual stating you have 100% access to those funds.

Cash Deposits

Placing cash deposits in your bank account independent of your normal income can be problematic for getting a mortgage. Since these deposits can’t easily be traced to their origin, it may raise some suspicious activity concerns even though they can be legitimate deposits from other income sources like freelancing gigs or side jobs.

Lenders want to see at least two months of mortgage statements without cash deposits and without large movements of money. Otherwise, expect these transfers and deposits to be identified, questioned and documented. While these requirements can seem like a nuisance to the average homebuyer,it’s a byproduct of the quality of loans being made in the market today. By fully documenting everything and leaving no stone unturned, lenders can do their due diligence in further substantiating a mortgage borrower’s ability to qualify. As such, these credit requirements help ensure there is little risk to buying a home or taking on a mortgage you cannot afford. (Here’s a calculator to help you figure out that home affordability number.)

In addition to income and a paper trail for your homebuying funds, make sure your credit score is in good shape before you head to your lender to get pre-approved or apply for a mortgage,. You can get your free annual credit reports at AnnualCreditReport.com under federal law. And you can see your credit scores for free every month on Credit.com.

More from Credit.com
How Much House Can You Afford?How to Get Pre-Approved for a MortgageWhy You Should Check Your Credit Before Buying a HomeFinanceLoansmortgage lendersbank account […]

First Cash Reports Full Year Earnings Per Share of $2.94; Fourth Quarter Revenues From Core Pawn Operations Increase …

ARLINGTON, Texas, Jan. 27, 2015 (GLOBE NEWSWIRE) — First Cash Financial Services, Inc. (FCFS), a leading international operator of retail pawn stores in the U.S. & Mexico, today announced record revenue, net income and earnings per share for the year ended December 31, 2014. The Company also initiated guidance for 2015 store growth and earnings expectations and announced that its Board of Directors has authorized a new share repurchase plan for up to two million shares of its common stock.

Mr. Rick Wessel, chief executive officer, stated, “I am excited by the significant milestones that we achieved in 2014. In addition to recording record revenues and net income, we added another 111 stores through the combination of de novo store openings and sizable acquisitions in both Mexico and the U.S. We ended the year with over 1,000 stores and have the most large format pawn locations of any operator in the Americas.”

“Revenue from core pawn retailing and lending activities increased to record levels despite significant fourth quarter foreign exchange weakness and further declines in scrap gold revenues. These headwinds impacted our fourth quarter earnings results by approximately $0.05 per share as compared to our previous forecast and tempers our dollar-translated earnings expectations for the upcoming year.”

“We continued in fiscal 2014 to generate significant operating cash flow, as evidenced by the Company’s EBITDA growth and generation of significant free cash flow. During 2014, we invested $83 million in acquisitions and capital expenditures and bought back $44 million of common stock, funded primarily by operating cash flows and a nominal increase in net debt. The Board of Directors’ decision to initiate a significant new buyback authorization reflects the strength of our balance sheet and confidence in our prospects for generating long-term earnings growth and cash flows.”

Earnings Highlights

Diluted earnings per share from continuing operations for fiscal 2014 were $2.94 compared to $2.86 in fiscal 2013 and in the fourth quarter of 2014 were $0.94 compared to $0.87 in the fourth quarter of 2013. Net income from continuing operations was $26.9 million for the fourth quarter and $85.4 million for the year ended December 31, 2014. While the Company experienced strong revenue growth from its core pawn operations, earnings results for the fourth quarter of 2014 were impacted by approximately $0.05 per share due to significant fourth quarter foreign exchange weakness and further declines in scrap gold volumes and pricing. The full year impact from foreign exchange headwinds and lower scrap gold profits was approximately $0.12 per share. Fourth quarter expenses also included non-recurring transaction and integration costs of approximately $0.03 per share associated with the recent 2014 acquisitions. Incremental interest expense related to the Company’s strategic senior note offering in March 2014 decreased earnings per share by $0.05 for the fourth quarter and $0.12 for the year, net of tax, which was partially offset by a lower effective income tax rate in 2014. EBITDA from continuing operations increased 11% for the quarter and 6% for fiscal 2014 despite the aforementioned currency and gold headwinds. Total EBITDA from continuing operations for fiscal 2014 was $147.3 million and net income from continuing operations was $85.4 million in fiscal 2014. A reconciliation of these non-GAAP financial measures to net income is provided elsewhere in this release.

All growth rates presented in “Revenue Highlights” and “Pawn Operating Metrics” are calculated on a constant currency basis by applying the currency exchange rate from the comparable prior-year period to the current year’s Mexican peso-denominated revenue. The average exchange rate for fiscal 2014 was 13.3 Mexican pesos / U.S. dollar versus 12.8 Mexican pesos / U.S. dollar in the comparable prior-year period. The average exchange rate for the fourth quarter of 2014 was 13.8 Mexican pesos / U.S. dollar versus 13.0 Mexican pesos / U.S. dollar in the comparable prior-year period.

Revenue Highlights

Revenue from core pawn activities (retail sales and pawn service fees) increased 19% in the fourth quarter of 2014 and 17% for the full year compared to the comparable prior-year periods. Total revenue for fiscal 2014 was $713 million, an increase of 10%, reflecting growth in core revenues partly offset by continued revenue decreases from non-core jewelry scrapping and payday lending operations. Even with the negative foreign exchange impact, 57% of fourth quarter 2014 revenue was generated in Mexico. For the full year, 54% of total fiscal 2014 revenue was from Mexico and 46% was from U.S. operations. Fourth quarter same-store core revenues in the Company’s pawn stores (which excludes wholesale jewelry scrapping) were up 4% compared to the prior-year period and resulted from an 8% increase in Mexico offset by a 2% decrease in the U.S. Full year 2014 same-store core revenue increased 4% in Mexico and 2% overall, while decreasing 3% in the U.S., as compared to the prior year. Revenue from non-core wholesale scrap jewelry operations decreased 25% and 29% in the fourth quarter and fiscal 2014, respectively, compared to the comparable prior-year periods. Gross profits from scrap jewelry operations for the full year totaled $7.5 million, accounting for only 2% of net revenue for the full year. The gross margin on scrap jewelry sales was 14% for the fourth quarter and 16% for the full year. Short-term loan and credit services revenue (collectively, payday lending operations) decreased 17% in the fourth quarter and 16% for the year compared to the prior-year periods. The decline was primarily the result of increased competition and additional regulatory restrictions in many Texas markets where the Company’s payday lending operations are focused. The non-core U.S. short-term loan business comprised only 4% of fourth quarter revenue and 5% of total revenue in fiscal 2014.

Pawn Operating Metrics

Pawn loans outstanding (receivable from customers) at year end increased by 15% in Mexico, 4% in the U.S. and 8% over the prior year. On a same-store basis, pawn loans increased 4% in Mexico, as loan growth remained strong in the interior markets, partially offset by slower growth in certain mature markets. Same-store pawn loans were down 5% in the U.S., attributable to the slightly lower than expected seasonal demand in the fourth quarter and strategic reductions of pawn balances in many acquired locations where the Company has been optimizing pawn lending practices and reducing loan to value ratios in order to improve long-term pawn yield and retail sales margins. With a solid December finish, the consolidated gross margin on retail merchandise sales remained impressive at 39% for both the fourth quarter and fiscal 2014 and compared favorably to the 39% retail margin in the fourth quarter of last year given the competitive climate and our continued shift toward slightly lower margin consumer electronics inventories. The average monthly pawn loan portfolio yield was unchanged at 14% for both fiscal 2014 and 2013, reflecting consistent pawn fee collection and redemption trends. Consolidated annualized inventory turns for fiscal 2014 remained strong at 3.6 times per year. Recent acquisition activity drove a slight increase in aged inventory (items held for over a year) but still accounted for only 5% of total inventory. Total inventories at December 31, 2014 increased 24% over the prior year, largely as a result of recent acquisitions.

Acquisitions and New Store Openings

A total of 111 pawn stores were added in fiscal 2014, bringing the total store count to 1,005. In total, 18 large format pawn store locations were opened during the fourth quarter of 2014, composed of two new store openings in Mexico and 16 store additions in the U.S. During fiscal 2014, a total of 78 large format, full-service stores were added in Mexico, composed of 31 new store openings and 47 acquired stores. These additions increased the number of large format pawn stores operated by the Company in Mexico by 14% over the past year. As of December 31, 2014, the Company had 674 stores in Mexico, of which 629 are large format, full-service locations. In October 2014, the Company completed the acquisition of a 15-store chain of large format pawn stores located in Kentucky, Tennessee, Missouri and South Carolina. Tennessee represents a new market for the Company. Fourth quarter store additions in the U.S. also included one de novo opening in Texas. For the full year of 2014, a total of 33 U.S. stores were opened or acquired in addition to the conversion of a small format pawn store to a large format pawn store. As of December 31, 2014, the Company had 255 large format, full-service pawn stores in the U.S., an increase of 12% over the prior year.

Financial Metrics

Operating efficiency improved during the fourth quarter, as the store-level pre-tax operating margin was 27% during the fourth quarter of 2014 compared to 26% in the fourth quarter of 2013. Full year store-level operating profit margin was 26% during fiscal 2014 compared to 27% during fiscal 2013. The EBITDA margin from continuing operations was 21% for fiscal 2014 and was consistent with prior year. The calculation of EBITDA margin from continuing operations is provided elsewhere in this release. Consolidated net operating margin (pre-tax income) for the fourth quarter was 18% and 16% for all of 2014. The Company’s return on equity for fiscal 2014 was 19%, while its return on assets for the year was 12%.

Liquidity

Total EBITDA from continuing operations was $45 million in the fourth quarter of 2014 and $147 million for the full fiscal year, resulting in increases of 11% and 6%, respectively, over the comparable prior-year periods. Cash provided by operating activities was $98 million for fiscal 2014, while free cash flow totaled $71 million for the year. EBITDA from continuing operations and free cash flow are defined in the detailed reconciliation of these non-GAAP financial measures provided elsewhere in this release. As of December 31, 2014, the Company had $68 million in cash on its balance sheet and $138 million of availability under its revolving bank credit facility. The leverage ratio at December 31, 2014 (outstanding indebtedness divided by trailing 12 months EBITDA from continuing operations) was 1.5:1. Net debt, defined as funded debt less invested cash, was $169 million at December 31, 2014. The leverage ratio of EBITDA from continuing operations to net debt was 1.1:1 and the ratio of net debt to equity was 0.38:1. During fiscal 2014, the Company invested $59 million in acquisitions, $24 million in capital expenditures and $44 million in stock repurchases, funded primarily with operating cash flow and a nominal $17 million increase in net debt.

Share Buyback Authorization

In January 2015, the Board of Directors authorized a new program for the repurchase of up to two million shares of the Company’s common stock. The authorized share repurchase total represents approximately 7% of the outstanding shares at December 31, 2014. Under its new share repurchase program, the Company can purchase common stock in open market transactions, block or privately negotiated transactions, and may from time to time purchase shares pursuant to a trading plan in accordance with Rule 10b5-1 and Rule 10b-18 under the Exchange Act or by any combination of such methods. The number of shares to be purchased and the timing of the purchases are based on a variety of factors, including, but not limited to, the level of cash balances, credit availability, debt covenant restrictions, general business conditions, regulatory requirements, the market price of the Company’s stock and the availability of alternative investment opportunities. No time limit was set for completion of repurchases under the new authorization and the program may be suspended or discontinued at any time. Under previously completed share repurchase programs over the past ten years, the Company has repurchased a total of 11.2 million shares, representing 39% of the currently outstanding share count, at an aggregate cost of $297 million.

Fiscal 2015 Outlook

For fiscal 2015, the Company is projecting 8% to 13% constant currency EBITDA growth from continuing operations, reflecting continued revenue and earnings growth from existing pawn operations and de novo store openings. The Company will continue to look opportunistically for large format pawn acquisitions in strategic markets, which could further increase EBITDA growth for 2015. Reflecting the recent strength of the U.S. dollar exchange rate for the Mexican peso and an anticipated increase in the Company’s effective tax rate, the Company is initiating its fiscal full-year 2015 guidance for earnings from continuing operations to be in a range of $2.75 to $2.90 per diluted share. The guidance assumes approximately $0.20 to $0.23 of earnings per share drag, net of tax, for fiscal 2015 due to the full year impact of an assumed exchange rate of 14.6 Mexican pesos / U.S. dollar for 2015, as compared to the actual rate of 13.3 in 2014. Full year earnings per share expectations are also impacted by approximately $0.18 to $0.21 per share in additional income tax expense in 2015 due to an expected increase in the effective tax rate to a normalized range of 31% to 32% for fiscal 2015, compared to 27% in 2014. Fiscal 2015 estimates are further tempered by expected declines in earnings from payday lending operations of approximately $0.04 per share, net of tax. The earnings per share guidance for fiscal 2015 does not include any assumed stock repurchases under the newly authorized two million share repurchase plan or any significant multi-store acquisitions. Given the complexity of the first quarter earnings comparisons that include the negative foreign exchange impact of approximately $0.04 per share, incremental interest expense related to the Company’s March 2014 senior note offering of approximately $0.05 per share, net of taxes, and the significantly higher effective tax rate compared to the first quarter of the prior year, the Company is providing first quarter earnings guidance of $0.56 to $0.60 per diluted share. This still implies positive currency-adjusted EBITDA growth compared to the first quarter of last year. The Company expects to add approximately 75 to 90 new stores in 2015, of which approximately 20 to 25 additions are expected to occur in the first quarter. A majority of the additions are expected to be de novo large format pawn stores in Mexico, but may include 15 to 20 new builds and/or small acquisitions in the U.S. Revenue growth in 2015 is expected to be generated exclusively from core pawn operations that will be partially offset by the continued de-emphasis of payday lending operations. The Company intends to close seven consumer loan stores during the first quarter of 2015. Approximately 96% of projected 2015 revenues are expected to be derived from the continued growth and focus on pawn operations.

Additional Commentary and Analysis

Mr. Wessel further commented on the Company’s fiscal 2014 results and expectations for 2015, “Although the impact of foreign exchange rates put unexpected pressure on earnings per share late in the year, we were pleased with most operational aspects of our fourth quarter results. The important fourth quarter retailing season was generally positive in both the U.S. and Mexico. On a constant currency basis, consolidated retail revenues increased 21% and were up 8% in Mexico on a same-store basis. We exceeded our prior-year December retail margin in Mexico, which was impressive given the margin pressures experienced by many electronics and discount retailers with whom we compete on a retail basis. Driven by the retail performance and solid pawn fee growth, consolidated same-store core revenues were up 4% in the fourth quarter, an improvement compared to both the prior sequential quarter and the prior year.”

“As we turn to 2015, our earnings expectations are primarily tempered by the significant variability in the foreign currency exchange market, as over half of our revenues are generated in Mexico. Our current outlook for the peso exchange rate is 14.6 to 1, a 10% decrease compared to the average rate of 13.3 to 1 in 2014. The change in the exchange rate is not expected to materially impact our core peso-based revenues, margins or profitability within Mexico. Additionally, the impact of foreign exchange rates on long term cash flows are largely mitigated by the fact that we retain our foreign cash in Mexico, where it can be utilized for reinvestment in new stores and strategic acquisitions in Mexico and potentially other future Latin American markets. We also began the year with additional headwinds from the return to a more normalized effective tax rate, which is estimated to be 31% to 32% for 2015, and somewhat lighter than expected seasonal pawn borrowing demand as we begin the year. As a result of these impacts, we have adjusted our forecasts accordingly. Lastly, our payday lending revenues and earnings continue by design to decline. While not a significant headwind, we still anticipate $0.04 per share of earnings drag when compared to the payday lending earnings contribution in 2014.”

“Even with these mostly non-core headwinds, our large format stores in both Mexico and the U.S. remain very profitable and should continue to generate industry-leading operating efficiencies and profitability margins. We expect to continue using our strong balance sheet and operating cash flows to invest in new stores and accretive acquisitions for long-term earnings growth. As we seek to generate significant free cash flows, we also anticipate returning a significant portion to our shareholders though the two million share buyback authorization announced today.”

“In summary, given our competitive strengths, growth platform and expanding customer base, we are excited about our ability to further grow our store count, revenues, and earnings. Our business model, coupled with our strong balance sheet, positions us to drive sustainable long-term growth in shareholder value. We continue to believe that we have the right formula for meaningful earnings and cash flow growth in the years to come.”

Forward-Looking Information

This release contains forward-looking statements about the business, financial condition and prospects of First Cash Financial Services, Inc. and its wholly owned subsidiaries (together, the “Company”). Forward-looking statements, as that term is defined in the Private Securities Litigation Reform Act of 1995, can be identified by the use of forward-looking terminology such as “believes,” “projects,” “expects,” “may,” “estimates,” “should,” “plans,” “targets,” “intends,” “could,” or “anticipates,” or the negative thereof, or other variations thereon, or comparable terminology, or by discussions of strategy or objectives. Forward-looking statements can also be identified by the fact that these statements do not relate strictly to historical or current matters. Rather, forward-looking statements relate to anticipated or expected events, activities, trends or results. Because forward-looking statements relate to matters that have not yet occurred, these statements are inherently subject to risks and uncertainties.

Forward-looking statements in this release include, without limitation, the Company’s expectations of earnings per share, earnings growth, expansion strategies, regulatory exposures, store openings, liquidity (including the availability of capital under existing credit facilities), cash flow, consumer demand for the Company’s products and services, income tax rates, currency exchange rates, future share repurchases and the price of gold and the impacts thereof, earnings and related transaction expenses from acquisitions, the ability to successfully integrate acquisitions and other performance results. These statements are made to provide the public with management’s current assessment of the Company’s business. Although the Company believes the expectations reflected in forward-looking statements are reasonable, there can be no assurances such expectations will prove to be accurate. Security holders are cautioned such forward-looking statements involve risks and uncertainties. Certain factors may cause results to differ materially from those anticipated by the forward-looking statements made in this release. Such factors are difficult to predict and many are beyond the control of the Company and may include, without limitation, the following:

changes in regional, national or international economic conditions, including inflation rates, unemployment rates and energy prices; changes in consumer demand, including purchasing, borrowing and repayment behaviors; changes in pawn forfeiture rates and credit loss provisions; changes in the market value of pawn collateral and merchandise inventories, including gold prices and the value of consumer electronics and other products; changes or increases in competition; the ability to locate, open and staff new stores and successfully integrate acquisitions; the availability or access to sources of used merchandise inventory; changes in credit markets, interest rates and the ability to establish, renew and/or extend the Company’s debt financing; the ability to maintain banking relationships for treasury services and processing of certain consumer lending transactions; the ability to hire and retain key management personnel; new federal, state or local legislative initiatives or governmental regulations (or changes to existing laws and regulations) affecting pawn businesses, consumer loan businesses and credit services organizations (in both the United States and Mexico); risks and uncertainties related to foreign operations in Mexico; changes in foreign currency exchange rates and the U.S. dollar to Mexican peso exchange rate in particular; changes in import/export regulations and tariffs or duties; changes in anti-money laundering and gun control regulations; unforeseen litigation; changes in tax rates or policies in the U.S. and Mexico; inclement weather, natural disasters and public health issues; security breaches, cyber attacks or fraudulent activity; a prolonged interruption in the Company’s operations of its facilities, systems, and business functions, including its information technology and other business systems; the implementation of new, or changes in the interpretation of existing, accounting principles or financial reporting requirements; and future business decisions.

These and other risks, uncertainties and regulatory developments are further and more completely described in the Company’s 2013 annual report on Form 10-K filed with the Securities and Exchange Commission on February 28, 2014, including the risks described in Item 1A “Risk Factors” of the Company’s annual report. Many of these risks and uncertainties are beyond the ability of the Company to control, nor can the Company predict, in many cases, all of the risks and uncertainties that could cause its actual results to differ materially from those indicated by the forward-looking statements. The forward-looking statements contained in this release speak only as of the date of this release, and the Company expressly disclaims any obligation or undertaking to report any updates or revisions to any such statement to reflect any change in the Company’s expectations or any change in events, conditions or circumstances on which any such statement is based, except as required by law.

About First Cash

Founded in 1988, First Cash is a leading international operator of retail pawn stores, which account for approximately 95% of the Company’s revenues. First Cash focuses on serving cash and credit constrained consumers through its retail locations, which buy and sell a wide variety of jewelry, electronics, tools and other merchandise, and make small consumer pawn loans secured by pledged personal property. Today, First Cash owns and operates 1,010 stores in 13 U.S. states and 29 states in Mexico.

First Cash is a component company in both the Standard & Poor’s SmallCap 600 Index(R) and the Russell 2000 Index(R). First Cash’s common stock (ticker symbol “FCFS”) is traded on the NASDAQ Global Select Market, which has the highest initial listing standards of any stock exchange in the world based on financial and liquidity requirements.

STORE COUNT ACTIVITY

The following table details store openings for the twelve months ended December 31, 2014:

Pawn Locations Consumer

Large Small Loan Total
Format (1) Format (2) Locations (3) Locations Domestic:

Total locations, beginning of period 227 25 57 309 New locations opened 7 1 — 8 Locations acquired 25 — — 25 Store format conversions 1 (12) 11 — Locations closed or consolidated (5) (3) (3) (11) Total locations, end of period 255 11 65 331

International:

Total locations, beginning of period 552 17 28 597 New locations opened 31 — — 31 Locations acquired 47 — — 47 Locations closed or consolidated (1) — — (1) Total locations, end of period 629 17 28 674

Total:

Total locations, beginning of period 779 42 85 906 New locations opened 38 1 — 39 Locations acquired 72 — — 72 Store format conversions 1 (12) 11 — Locations closed or consolidated (6) (3) (3) (12) Total locations, end of period 884 28 93 1,005

(1) The large format locations include retail showrooms and accept a broad array of pawn collateral including consumer electronics, appliances, power tools, jewelry and other general merchandise items. At December 31, 2014, 129 of the U.S. large format pawn stores also offered consumer loans or credit services products.

(2) The small format locations typically have limited retail operations and primarily accept jewelry and small electronic items as pawn collateral and also offer consumer loans or credit services products.

(3) The Company’s U.S. free-standing, small format consumer loan locations offer a credit services product and are all located in Texas. The Mexico locations offer small, short-term consumer loans. The Company’s credit services operations also include an internet distribution channel for customers in the state of Texas.
FIRST CASH FINANCIAL SERVICES, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

Three Months Ended Twelve Months Ended
December 31, December 31,
2014 2013 2014 2013
(in thousands, except per share amounts) Revenue:

Retail merchandise sales $ 130,336 $ 111,745 $ 428,182 $ 367,187 Pawn loan fees 52,386 47,897 199,357 181,555 Consumer loan and credit services fees 9,075 11,011 36,749 43,781 Wholesale scrap jewelry revenue 10,977 14,550 48,589 68,325 Total revenue 202,774 185,203 712,877 660,848

Cost of revenue:

Cost of retail merchandise sold 79,310 68,684 261,673 221,361 Consumer loan and credit services loss provision 2,395 3,280 9,287 11,368 Cost of wholesale scrap jewelry sold 9,436 13,047 41,044 58,545 Total cost of revenue 91,141 85,011 312,004 291,274

Net revenue 111,633 100,192 400,873 369,574

Expenses and other income:

Store operating expenses 52,267 48,559 198,986 181,321 Administrative expenses 14,236 10,840 54,586 49,530 Depreciation and amortization 4,475 4,015 17,476 15,361 Interest expense 4,122 1,018 13,527 3,492 Interest income (160) (55) (682) (322) Total expenses and other income 74,940 64,377 283,893 249,382

Income from continuing operations before income taxes 36,693 35,815 116,980 120,192

Provision for income taxes 9,752 10,297 31,542 35,713

Income from continuing operations 26,941 25,518 85,438 84,479

Loss from discontinued operations, net of tax (740) (272) (633)

Net income $ 26,941 $ 24,778 $ 85,166 $ 83,846

Basic income per share:

Income from continuing operations $ 0.95 $ 0.88 $ 2.98 $ 2.91 Loss from discontinued operations (0.03) (0.01) (0.02) Net income per basic share $ 0.95 $ 0.85 $ 2.97 $ 2.89

Diluted income per share:

Income from continuing operations $ 0.94 $ 0.87 $ 2.94 $ 2.86 Loss from discontinued operations (0.03) (0.01) (0.02) Net income per diluted share $ 0.94 $ 0.84 $ 2.93 $ 2.84

Weighted average shares outstanding:

Basic 28,397 28,933 28,671 29,079 Diluted 28,804 29,393 29,070 29,574
FIRST CASH FINANCIAL SERVICES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

December 31,
2014 2013
(in thousands) ASSETS

Cash and cash equivalents $ 67,992 $ 70,643 Pawn loan fees and service charges receivable 16,926 16,689 Pawn loans 118,536 115,234 Consumer loans, net 1,241 1,450 Inventories 91,088 77,793 Other current assets 12,092 8,413 Total current assets 307,875 290,222

Property and equipment, net 113,750 108,137 Goodwill, net 276,882 251,241 Other non-current assets 16,168 9,373 Total assets $ 714,675 $ 658,973

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current portion of notes payable $ — $ 3,326 Accounts payable and accrued liabilities 42,559 38,023 Income taxes payable 7,412 Total current liabilities 42,559 48,761

Revolving unsecured credit facility 22,400 182,000 Notes payable, net of current portion 5,026 Senior unsecured notes 200,000 — Deferred tax liabilities 1,165 8,827 Total liabilities 266,124 244,614

Stockholders’ equity:

Preferred stock — Common stock 397 394 Additional paid-in capital 188,062 176,675 Retained earnings 582,894 497,728 Accumulated other comprehensive loss from cumulative foreign currency translation adjustments (26,168) (7,751) Common stock held in treasury, at cost (296,634) (252,687) Total stockholders’ equity 448,551 414,359 Total liabilities and stockholders’ equity $ 714,675 $ 658,973

FIRST CASH FINANCIAL SERVICES, INC.
OPERATING INFORMATION
(UNAUDITED)

The following table details the components of revenue for the three months ended December 31, 2014 as compared to the three months ended December 31, 2013 (in thousands). Constant currency results exclude the effects of foreign currency translation and are calculated by translating current-year results at prior-year average exchange rates, which is more fully described elsewhere in this release.

Three Months Ended

Increase/(Decrease)
December 31,

Constant Currency
2014 2013 Increase/(Decrease) Basis Domestic revenue:

Retail merchandise sales $ 49,604 $ 40,529 $ 9,075 22% 22% Pawn loan fees 24,154 22,109 2,045 9% 9% Consumer loan and credit services fees 8,437 10,227 (1,790) (18)% (18)% Wholesale scrap jewelry revenue 5,828 7,767 (1,939) (25)% (25)%
88,023 80,632 7,391 9% 9% International revenue:

Retail merchandise sales 80,732 71,216 9,516 13% 20% Pawn loan fees 28,232 25,788 2,444 9% 16% Consumer loan and credit services fees 638 784 (146) (19)% (14)% Wholesale scrap jewelry revenue 5,149 6,783 (1,634) (24)% (24)%
114,751 104,571 10,180 10% 16% Total revenue:

Retail merchandise sales 130,336 111,745 18,591 17% 21% Pawn loan fees 52,386 47,897 4,489 9% 13% Consumer loan and credit services fees 9,075 11,011 (1,936) (18)% (17)% Wholesale scrap jewelry revenue (1) 10,977 14,550 (3,573) (25)% (25)%
$ 202,774 $ 185,203 $ 17,571 9% 13%

(1) Wholesale scrap jewelry revenue during the three months ended December 31, 2014 consisted primarily of gold sales, of which approximately 7,800 ounces were sold at an average price of $1,222 per ounce, compared to approximately 10,400 ounces of gold sold at $1,213 per ounce in the prior-year period.

FIRST CASH FINANCIAL SERVICES, INC.
OPERATING INFORMATION (CONTINUED)
(UNAUDITED)

The following table details the components of revenue for the twelve months ended December 31, 2014 as compared to the twelve months ended December 31, 2013 (in thousands). Constant currency results exclude the effects of foreign currency translation and are calculated by translating current-year results at prior-year average exchange rates, which is more fully described elsewhere in this release.

Twelve Months Ended

Increase/(Decrease)
December 31,

Constant Currency
2014 2013 Increase/(Decrease) Basis Domestic revenue:

Retail merchandise sales $ 172,354 $ 139,469 $ 32,885 24% 24% Pawn loan fees 89,952 79,398 10,554 13% 13% Consumer loan and credit services fees 34,051 40,378 (6,327) (16)% (16)% Wholesale scrap jewelry revenue 28,243 38,617 (10,374) (27)% (27)%
324,600 297,862 26,738 9% 9% International revenue:

Retail merchandise sales 255,828 227,718 28,110 12% 17% Pawn loan fees 109,405 102,157 7,248 7% 12% Consumer loan and credit services fees 2,698 3,403 (705) (21)% (17)% Wholesale scrap jewelry revenue 20,346 29,708 (9,362) (32)% (32)%
388,277 362,986 25,291 7% 11% Total revenue:

Retail merchandise sales 428,182 367,187 60,995 17% 20% Pawn loan fees 199,357 181,555 17,802 10% 12% Consumer loan and credit services fees 36,749 43,781 (7,032) (16)% (16)% Wholesale scrap jewelry revenue (1) 48,589 68,325 (19,736) (29)% (29)%
$ 712,877 $ 660,848 $ 52,029 8% 10%

(1) Wholesale scrap jewelry revenue during the twelve months ended December 31, 2014 consisted primarily of gold, of which approximately 33,100 ounces sold at an average selling price of $1,268 per ounce, compared to approximately 42,300 ounces of gold sold at $1,423 per ounce in the prior-year period.

FIRST CASH FINANCIAL SERVICES, INC.
OPERATING INFORMATION (CONTINUED)
(UNAUDITED)

The following table details customer loans and inventories held by the Company and active credit service organization (“CSO”) credit extensions from an independent third-party lender as of December 31, 2014 as compared to December 31, 2013 (in thousands). Constant currency results exclude the effects of foreign currency translation and are calculated by translating current-year balances at the prior-year end-of-period exchange rate, which is more fully described elsewhere in this release.

Increase/(Decrease)
Balance at December 31,

Constant Currency
2014 2013 Increase/(Decrease) Basis Domestic:

Pawn loans $ 68,100 $ 65,716 $ 2,384 4% 4% CSO credit extensions held by independent third-party (1) 10,421 12,240 (1,819) (15)% (15)% Other consumer loans 790 832 (42) (5)% (5)%
79,311 78,788 523 1% 1% International:

Pawn loans 50,436 49,518 918 2% 15% Other consumer loans 451 618 (167) (27)% (18)%
50,887 50,136 751 1% 14% Total:

Pawn loans 118,536 115,234 3,302 3% 8% CSO credit extensions held by independent third-party (1) 10,421 12,240 (1,819) (15)% (15)% Other consumer loans 1,241 1,450 (209) (14)% (10)%
$ 130,198 $ 128,924 $ 1,274 1% 6% Pawn inventories:

Domestic pawn inventories $ 49,969 $ 40,910 $ 9,059 22% 22% International pawn inventories 41,119 36,883 4,236 11% 26%
$ 91,088 $ 77,793 $ 13,295 17% 24%

(1) CSO amounts outstanding are composed of the principal portion of active CSO extensions of credit by an independent third-party lender, which are not included on the Company’s balance sheet, net of the Company’s estimated fair value of its liability under the letters of credit guaranteeing the extensions of credit.

FIRST CASH FINANCIAL SERVICES, INC.
OPERATING INFORMATION (CONTINUED)
(UNAUDITED)

The following table details the composition of pawn collateral and the average outstanding pawn loan receivable as of December 31, 2014 as compared to December 31, 2013.

Balance at December 31,
2014 2013 Composition of pawn collateral:

Domestic pawn loans:

General merchandise 44% 40% Jewelry 56% 60%
100% 100% International pawn loans:

General merchandise 88% 87% Jewelry 12% 13%
100% 100% Total pawn loans:

General merchandise 62% 61% Jewelry 38% 39%
100% 100%

Average outstanding pawn loan amount:

Domestic pawn loans $ 171 $ 171 International pawn loans (1) 67 71 Total pawn loans (1) 103 107

(1) Decline in average outstanding pawn loan is primarily due to the decline in the Mexican peso in 2014.

FIRST CASH FINANCIAL SERVICES, INC.
NON-GAAP FINANCIAL INFORMATION
(UNAUDITED)

The Company uses certain financial calculations such as EBITDA from continuing operations, free cash flow and constant currency results (as defined or explained below) as factors in the measurement and evaluation of the Company’s operating performance and period-over-period growth. The Company derives these financial calculations on the basis of methodologies other than generally accepted accounting principles (“GAAP”), primarily by excluding from a comparable GAAP measure certain items that the Company does not consider to be representative of its actual operating performance. These financial calculations are “non-GAAP financial measures” as defined in Securities and Exchange Commission (“SEC”) rules. The Company uses these financial calculations in operating its business because management believes they are less susceptible to variances in actual operating performance that can result from the excluded items and other infrequent charges. The Company presents these financial measures to investors because management believes they are useful to investors in evaluating the primary factors that drive the Company’s operating performance and because management believes they provide greater transparency into the Company’s results of operations. However, items that are excluded and other adjustments and assumptions that are made in calculating EBITDA from continuing operations, free cash flow and constant currency results are significant components in understanding and assessing the Company’s financial performance. These non-GAAP financial measures should be evaluated in conjunction with, and are not a substitute for, the Company’s GAAP financial measures. Further, because these non-GAAP financial measures are not determined in accordance with GAAP and are thus susceptible to varying calculations, EBITDA from continuing operations, free cash flow and constant currency results as presented may not be comparable to other similarly titled measures of other companies.

FIRST CASH FINANCIAL SERVICES, INC.
NON-GAAP FINANCIAL INFORMATION (CONTINUED)
(UNAUDITED)

Earnings from Continuing Operations Before Interest, Taxes, Depreciation and Amortization

The Company defines EBITDA from continuing operations as net income (loss) before income (loss) from discontinued operations net of tax, income taxes, depreciation and amortization, interest expense and interest income. EBITDA from continuing operations is commonly used by investors to assess a company’s leverage capacity, liquidity and financial performance. However, EBITDA from continuing operations has limitations as an analytical tool and should not be considered in isolation or as a substitute for net income (loss) or other statement of income data prepared in accordance with GAAP. The following table provides a reconciliation of net income to EBITDA from continuing operations (in thousands):

Three Months Ended Twelve Months Ended
December 31, December 31,
2014 2013 2014 2013 Net income $ 26,941 $ 24,778 $ 85,166 $ 83,846 Loss from discontinued operations, net of tax 740 272 633 Income from continuing operations 26,941 25,518 85,438 84,479 Adjustments:

Income taxes 9,752 10,297 31,542 35,713 Depreciation and amortization 4,475 4,015 17,476 15,361 Interest expense 4,122 1,018 13,527 3,492 Interest income (160) (55) (682) (322) EBITDA from continuing operations $ 45,130 $ 40,793 $ 147,301 $ 138,723

EBITDA from continuing operations margin calculated as follows:

Total revenue from continuing operations $ 202,774 $ 185,203 $ 712,877 $ 660,848 EBITDA from continuing operations $ 45,130 $ 40,793 $ 147,301 $ 138,723 EBITDA from continuing operations as a percentage of revenue 22% 22% 21% 21%

Leverage ratio (indebtedness divided by EBITDA from continuing operations):

Indebtedness

$ 222,400 $ 190,352 EBITDA from continuing operations

$ 147,301 $ 138,723 Leverage ratio

1.5:1 1.4:1

FIRST CASH FINANCIAL SERVICES, INC.
NON-GAAP FINANCIAL INFORMATION (CONTINUED)
(UNAUDITED)

Free Cash Flow

For purposes of its internal liquidity assessments, the Company considers free cash flow, which is defined as cash flow from the operating activities of continuing and discontinued operations reduced by purchases of property and equipment and net cash outflow from loan receivables. Free cash flow is commonly used by investors as a measure of cash generated by business operations that will be used to repay scheduled debt maturities and can be used to invest in future growth through new business development activities or acquisitions, repurchase stock, or repay debt obligations prior to their maturities. These metrics can also be used to evaluate the Company’s ability to generate cash flow from business operations and the impact that this cash flow has on the Company’s liquidity. However, free cash flow has limitations as an analytical tool and should not be considered in isolation or as a substitute for cash flow from operating activities, including discontinued operations, or other income statement data prepared in accordance with GAAP. The following table reconciles “net cash flow from operating activities” to “free cash flow” (in thousands):

Twelve Months Ended
December 31,
2014 2013 Cash flow from operating activities, including discontinued operations $ 97,679 $ 106,718 Cash flow from investing activities:

Loan receivables (2,470) (411) Purchases of property and equipment (23,954) (26,672) Free cash flow $ 71,255 $ 79,635

Constant Currency

The Company’s reporting currency is the U.S. dollar. However, certain performance metrics discussed in this release are presented on a “constant currency” basis, which may be considered a non-GAAP measurement of financial performance under GAAP. The Company’s management uses constant currency results to evaluate operating results of certain business operations in Mexico, which are transacted in Mexican pesos. Pawn scrap jewelry in Mexico is sold in U.S. dollars and, accordingly, does not require a constant currency adjustment. Constant currency results reported herein are calculated by translating certain balance sheet and income statement items denominated in Mexican pesos using the exchange rate from the prior-year comparable period, as opposed to the current comparable period, in order to exclude the effects of foreign currency rate fluctuations for purposes of evaluating period-over-period comparisons. For balance sheet items, the end-of-period exchange rate of 13.1 to 1 at December 31, 2013 was used compared to the exchange rate of 14.7 to 1 at December 31, 2014. For income statement items, the average closing daily exchange rate for the appropriate period was used. The average exchange rate for the prior-year quarter ended December 31, 2013 was 13.0 to 1 compared to the current-quarter rate of 13.8 to 1. The average exchange rate for the prior-year twelve-month period ended December 31, 2013 was 12.8 to 1 compared to the current year-to-date rate of 13.3 to 1.

Professional ServicesInvestment & Company Information Contact:

For further information, please contact:
Gar Jackson
Global IR Group
Phone: (949) 873-2789
Email: gar@globalirgroup.com
Doug Orr, Executive Vice President and Chief Financial Officer
Phone: (817) 505-3199
Email: investorrelations@firstcash.com
Website: www.firstcash.com

[…]

Fitch Affirms Kentucky Higher Education Student Loan Corp.

NEW YORK–(BUSINESS WIRE)–

Fitch Ratings has affirmed the ratings for the senior notes currently rated ‘AAAsf’ issued by Kentucky Higher Education Student Loan Corporation (KHESLC 2013-1). The Rating Outlook remains Stable.

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: CE is provided by overcollateralization (OC; the excess of trust’s asset balance over bond balance) and excess spread. As of the most current distribution, reported parity is at 104.85%. Cash can only be released to the issuer when the bonds are paid in full.

Adequate Liquidity Support: Liquidity support is provided by a reserve account currently sized at $1,409,500.

Acceptable Servicing Capabilities: KHESLC is responsible for day-to-day servicing of the trust and Nelnet Servicing LLC is the backup servicer. Fitch believes both 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:

KHESLC series 2013-1 at ‘AAAsf’; Outlook Stable.

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

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).

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:

–‘Kentucky Higher Education Student Loan Corporation, Series 2013-1 – Appendix'(Jan. 28, 2013);

–‘Representations, Warranties, and Enforcement Mechanisms in Global Structured Finance Transactions’ (Oct. 31, 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=750530

Kentucky Higher Education Student Loan Corporation, Series 2013-1 (US ABS)

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=699889

Representations, Warranties and Enforcement Mechanisms in Global Structured Finance Transactions

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

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=978609

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 Ratingsstudent loans Contact:

Fitch Ratings

Primary Analyst

Nicole Edwards

Director

+1 212-908-9114

Fitch Ratings, Inc.

33 Whitehall Street

New York, NY 10004

or

Committee Chairperson

Tracy Wan

Senior Director

+1 212-908-9171

or

Media Relations, New York

Sandro Scenga

+1 212-908-0278

sandro.scenga@fitchratings.com […]