TEXT-Fitch Affirms Education Funding Capital Trust-IV Sr. & Subordinate Notes

Mon Jul 23, 2012 6:37pm EDT

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NEW YORK, July 23 (Fitch) Fitch Ratings affirms the senior and subordinate student loan notes issued by Education Funding Capital Trust-IV at 'AAAsf' and 'Asf' respectably. The Rating Outlook for the senior notes, which is tied to the sovereign rating of the U.S. government, remains Negative. The Rating Outlook for the subordinate notes remains Stable. The collateral supporting the notes is comprised of student loans originated under the Federal Family Education Loan Program (FFELP).

Fitch affirms the ratings on the Education Funding Capital Trust-IV senior and subordinate notes based on the sufficient level of credit enhancement to cover the applicable risk factor stresses. Credit enhancement for the senior and subordinate notes consists of overcollateralization and projected minimum excess spread, while the senior notes also benefit from subordination provided by the class B notes.

Fitch used its 'Global Structured Finance Rating Criteria' and 'Rating U.S. Federal Family Education Loan Program Student Loan ABS' to review the ratings. Fitch has taken the following rating actions: Education Funding Capital Trust-IV

--Class A-2 affirmed at 'AAAsf'; Outlook Negative;

--Class A-3 affirmed at 'AAAsf'; Outlook Negative;

--Class A-4 affirmed at 'AAAsf'; Outlook Negative;

--Class A-5 affirmed at 'AAAsf'; Outlook Negative;

--Class A-6 affirmed at 'AAAsf'; Outlook Negative;

--Class B-1 affirmed at 'Asf'; Outlook Stable.