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With a little over one year of seasoning, the student loans in the trust have a cumulative gross default rate of 5.75% that is 44.4% of the expected lifetime default at closing. As of the August 2009 distribution, total parity has increased to 98.49%; however, it is expected that parity will start declining if the elevated level of loss accumulation continues. Upon gathering additional information, Fitch will further analyze the performance to calculate the updated loss multiples and determine the appropriate ratings.
The transaction was placed 'Under Analysis' on July 17, 2009 in connection with the downgrade of CIT Group Inc. (CIT), the parent company of Student Loan Xpress (SLX) and Xpress Loan Services (XLS). SLX is the servicing administrator and is responsible for overseeing the servicers to ensure that the private student loans are being serviced according to the TERI and LEARN guidelines. The servicers are Great Lakes Education Loan Services, Inc. (rated 'Proficient' for private loans by Fitch), XLS and The Pennsylvania Higher Education Assistance Agency (PHEAA). Since CIT's downgrade, XLS has indicated that there has been no disruption to the servicing and administration of student loans. Fitch has determined that operational risk related to SLX and XLS are currently not present and the Rating Watch Negative is tied solely to the concern with respect to the collateral performance.
The trust portfolio consists of private student loans that were originated either by TERI or LEARN underwriting guidelines by Liberty Bank, N.A. or Charter One Bank, N.A. Loan losses are guaranteed by a TERI guaranty for TERI originated loans and by the LEARN account for LEARN originated loans. The trust portfolio is comprised of 80.9% of LEARN loans and 19.1% of TERI loans. Credit enhancement for the trust consists of excess spread and overcollateralization. Higher priority bonds also benefit from subordination provided by the lower priority bonds.
Fitch places the following rating on Rating Watch Negative
PARTS Private Student Loan Trust series 2007-CT1
--Class A 'AAA';
--Class B 'A';
--Class C 'BBB'.
The following applicable criteria report is available on Fitch's web site at 'www.fitchratings.com': 'Global Structured Finance Rating Criteria' dated Sept. 30, 2009 and 'U.S. Private Student Loan ABS Criteria' dated Aug. 24, 2009.
Additional information is available at 'www.fitchratings.com'.
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.
SOURCE: Fitch Ratings
Fitch Ratings, New York Emily Lee, 212-908-0667 Aoto Kenmochi, 212-908-0867 or Media Relations: Sandro Scenga, 212-908-0278 Email: sandro.scenga@fitchratings.com
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