Reuters: Financial Services and Real Estate: TEXT-S&P cuts, affirms Access Group 2002-1, 2003-1, 2004-1 ratings

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TEXT-S&P cuts, affirms Access Group 2002-1, 2003-1, 2004-1 ratings Jun 8th 2012, 19:29 Fri Jun 8, 2012 3:29pm EDT OVERVIEW -- Access Group Inc.'s series 2002-1, 2003-1, and 2004-1 asset-backed note issuances are backed by Federal Family Education Loan Program (FFELP) student loans. -- We lowered our ratings on the class B notes from these series and removed them from CreditWatch negative because the limited available excess spread may hinder the master trust's ability to build and maintain parity at par by their final maturity dates, particularly in a rising interest rate environment. -- We affirmed the ratings on the class A notes from these series to reflect our view of the protection provided by the subordination of the class B notes and the trust's senior parity ratios despite the presence of limited excess spread. -- On Nov. 9, 2010, we placed our ratings on the class B notes on CreditWatch with negative implications pending our assessment of the effect of the trust's limited available excess spread. NEW YORK (Standard & Poor's) June 8, 2012--Standard & Poor's Ratings Services today lowered its ratings on the class B notes from Access Group Inc.'s series 2002-1, 2003-1, and 2004-1 issuances and removed them from CreditWatch negative, where we placed them on Nov. 9, 2010. At the same time, we affirmed our ratings on the class A notes from the same series (see rating list). Today's rating actions reflect the trust's collateral performance to date, our views regarding future collateral performance, the trust's structure, and the credit enhancement available. In addition, our analysis incorporated cash flow modeling and secondary credit factors such as credit stability, payment priorities under certain scenarios, and sector- and issuer-specific analysis. STRUCTURE The liabilities in each series are composed of both taxable floating-rate notes (FRNs) and auction-rate notes (ARS)--approximately 54% and 46%, respectively. All of the class B notes are ARS. The FRNs pay interest based on three-month-LIBOR and are intended to pay down their principal based on predetermined principal amortization schedules. If the auctions fail for the ARS, the trust documents stipulate that the ARS pay interest at the maximum auction rate defined as the lesser of: -- LIBOR plus a margin of 1.50% with respect to any class of notes rated at least 'A-(sf)' by at least two rating agencies; -- The 90-day T-bill rate plus a margin of 1.2% to 1.75%, depending on the rating; -- A net loan rate, which is the weighted average return on the trust's student loans less expenses and interest on the FRNs expressed as a percentage of the average principal amount of the ARS notes; or -- 18%. At closing, the trust structure for all of the notes provided a sequential principal payment waterfall with an initial senior parity of 101.6% and a total parity of 98.1%.RELATED CRITERIA AND RESEARCH -- Standard & Poor's Ratings Definitions, published May 23, 2012. -- Global Structured Finance Scenario And Sensitivity Analysis: The Effects Of The Top Five Macroeconomic Factors, published Nov. 4, 2011. -- 239 Student Loan ABS Ratings Affirmed Following U.S. Sovereign Downgrade; 118 Remain On Watch Negative, published Aug. 30, 2011. -- United States of America Long-Term Rating Lowered To 'AA+' On Political Risks And Rising Debt Burden; Outlook Negative, published on Aug. 5, 2011. -- 599 Structured Finance Ratings Put On CreditWatch Negative Following U.S. Sovereign CreditWatch Placement, published July 15, 2011. -- Principles of Credit Ratings, published Feb. 16, 2011. -- Nine Ratings Lowered, 115 Affirmed on 11 ABS Issuer Trusts Containing FFELP Student Loan Collateral, published Nov. 9, 2010. -- Methodology: Criteria For Global Structured Finance Transactions Subject To A Change In Payment Priorities Upon A Nonmonetary EOD, published March 16, 2010. -- Student Loan Criteria: Student Loan Programs, published Oct. 1, 2004. RATINGS LOWERED AND REMOVED FROM CREDITWATCH NEGATIVE Access Group Inc. US$488.9 mil federal student loan asset-backed notes series 2002-1 Rating Class CUSIP To From B 00432CAP6 B (sf) BBB (sf)/Watch Neg Access Group Inc. US$669.154 mil federal student loan asset-backed notes series 2003-1 Rating Class CUSIP To From B 00432CBE0 B (sf) BBB (sf)/Watch Neg Access Group Inc. US$750 mil federal student loan asset-backed notes series 2004-1 Rating Class CUSIP To From B 00432CBT7 B (sf) BBB (sf)/Watch Neg RATINGS AFFIRMED Access Group Inc. US$488.9 mil federal student loan asset-backed notes series 2002-1 Class CUSIP Rating A-2 00432CAL5 AA+ (sf) A-3 00432CAM3 AA+ (sf) A-4 00432CAN1 AA+ (sf) Access Group Inc. US$669.154 mil federal student loan asset-backed notes series 2003-1 Class CUSIP Rating A-2 00432CAY7 AA+ (sf) A-3 00432CAZ4 AA+ (sf) A-4 00432CBA8 AA+ (sf) A-5 00432CBB6 AA+ (sf) A-6 00432CBC4 AA+ (sf) Access Group Inc. US$750 mil federal student loan asset-backed notes series 2004-1 Class CUSIP Rating A-1 00432CBM2 AA+ (sf) A-2 00432CBN0 AA+ (sf) A-3 00432CBP5 AA+ (sf) A-4 00432CBQ3 AA+ (sf) A-5 00432CBR1 AA+ (sf) Link this Share this Digg this Email Reprints

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