February 27, 2013 / 9:56 PM / 5 years ago

TEXT-Fitch affirms Iowa Student Loan Liquidity Corp 2005-1 notes

Feb 27 - Fitch Ratings has affirmed the senior and subordinate student loan
notes issued by Iowa Student Loan Liquidity Corporation 2005-1 at 'AAAsf' and
'A+sf', respectively. The Rating Outlooks on the senior notes, which are tied to
the sovereign rating of the U.S. government, remain Negative, while the Rating
Outlook on the subordinate note remains Stable.


The ratings on the senior and subordinate notes are affirmed 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 note.


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 ratings:

Iowa Student Loan Liquidity Corporation 2005-1:
--Class A-2 at 'AAAsf'; Outlook Negative;
--Class A-3 at 'AAAsf'; Outlook Negative;
--Class B at 'A+sf'; Outlook Stable.

Additional information is available at 'www.fitchratings.com'. The ratings above
were solicited by, or on behalf of, the issuer, and therefore, Fitch has been
compensated for the provision of the ratings.

Applicable Criteria and Related Research:
--'Global Structured Finance Rating Criteria' dated June 6, 2012;
--'Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria'
dated April 3, 2012.

Applicable Criteria and Related Research
Global Structured Finance Rating Criteria
Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria
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