Fitch Affirms EFS Volunteer No 3 LLC, Series 2012-1

Fri Jun 7, 2013 3:56pm EDT

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Fitch Affirms EFS Volunteer No 3 LLC, Series 2012-1

Fitch Ratings has affirmed the senior student loan notes issued by EFS Volunteer No 3 LLC, Series 2012-1 at 'AAAsf'. The Rating Outlook on the senior notes, which is tied to the sovereign rating of the U.S. government, remains Negative.

KEY RATING DRIVERS

The ratings on the senior notes are affirmed based on the sufficient level of credit enhancement to cover the applicable risk factor stresses. Credit enhancement for the senior notes consists of overcollateralization, subordination, and projected excess spread.

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.

Initial Key Rating Drivers and Rating Sensitivity further described in the New Issue Report published on Aug. 6, 2012.

Fitch has affirmed the following ratings:

EFS Volunteer No 3 LLC, Series 2012-1:

--2012-1 A-1 notes at 'AAAsf'; Outlook Negative;

--2012-1 A-2 notes at 'AAAsf'; Outlook Negative;

--2012-1 A-3 notes at 'AAAsf'; Outlook Negative.

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

Applicable Criteria and Related Research:

--'Global Structured Finance Rating Criteria' May 24, 2013;

--'Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria' May 17, 2013.

--'EFS Volunteer No. 3, LLC Series 2012-1' Aug. 6, 2012.

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:

--'EFS Volunteer No. 3, LLC Series 2012-1 -- Appendix ', Aug. 6, 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

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=708661

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

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=708795

EFS Volunteer No. 3, LLC Series 2012-1

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=684348

EFS Volunteer No. 3, LLC Series 2012-1 -- Appendix

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=685914

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

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

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=793178

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Fitch Ratings
Primary Analyst
Harry Kohl, +1 212-908-0837
Associate Director
Fitch Ratings, Inc.
One State Street Plaza
New York, NY 10004
or
Committee Chairperson
Tracy Wan, +1 212-908-9171
Senior Director
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