OREANDA-NEWS. S&P Global Ratings today assigned its preliminary ratings to Navient Student Loan Trust 2016-6's $1,005 million student loan-backed notes series 2016-6 notes (see list).

The note issuance is an asset-backed securities transaction backed by a pool of student loans that are at least 97% reinsured by the U. S. federal government.

The preliminary ratings are based on information as of Oct. 11, 2016. Subsequent information may result in the assignment of final ratings that differ from the preliminary ratings.

The preliminary ratings reflect:The transaction's expected initial total parity of approximately 102.76%. The total parity is defined as the percentage of total assets divided by the class A-1, A-2, and A-3 note amounts. The transaction's expected initial class A-1 and A-2 parities of approximately 372.82% and 185.40%, respectively. Class A-1 parity is defined as the percentage of total assets divided by the class A-1 note amount. Class A-2 parity is defined as the percentage of total assets divided by the total of the class A-1 and A-2 amounts. The reserve account, which equals 1.65% of the initial pool balance ($16,762,999) at closing, and is required to be maintained at 1.65% of the current pool balance until December 2017, when the reserve requirement decreases to 0.25% of the current pool balance. The reserve has a floor equal to 0.10% of the initial pool balance ($1,015,939).The transaction's payment structure, which builds overcollateralization to the greater of 5.50% of the current pool balance and 1.97% of the initial pool balance ($20,000,000), from 2.68% at closing (overcollateralization is defined as the excess of the pool balance and the reserve over the total notes, divided by the pool balance plus the reserve balance).Our view that the likelihood that the payment structure changes because of a nonmonetary event of default is sufficiently remote, allowing for different ratings on each class. The U. S. federal government's reinsurance of at least 97% of the loans' principal and interest. Our expectation of timely interest and principal payments made by the legal final maturity date in the cash flow runs that simulated our 'AAA' and 'AA+' rating credit stress and liquidity scenarios. A credit stability scenario analysis, which indicates that under moderately stressful economic conditions (defined as approximately 2.25x the expected defaults), the 'AAA' and 'AA+' ratings would not decline more than one and three rating categories in the first and third years, respectively. The transaction's legal structure.