KBRA Affirms the Ratings on Brazos Education Loan Authority 2018-1
28 Jun 2024 | New York
KBRA affirms its ratings on the notes issued from Brazos Education Loan Authority 2018-1 (“BELA 2018-1”) following its surveillance analysis, which indicated that current credit enhancement, which includes the reinsurance provided by the U.S. Government under the Federal Family Education Loan Program ("FFELP"), is sufficient to support the outstanding ratings.
FFELP loans are guaranteed against default by a third-party guarantor for at least 97% of principal and accrued interest depending on the loan disbursement date, which is reinsured by the U.S. Department of Education. At closing, 99.8% of the loans were reimbursable up to 98% of the defaulted amount and the additional 0.2% was 100% guaranteed.
Credit enhancement consists of overcollateralization, a reserve account, and excess interest on portfolio loans. Total parity for this transaction has increased to 134.95% from 103.57% at closing.
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