OREANDA-NEWS. Fitch Ratings has affirmed the ratings for the student loan revenue bonds issued by Massachusetts Educational Financing Authority Issue K at 'Asf'. The Rating Outlook remains Stable.

A full list of rating actions follows at the end of this release.

KEY RATING DRIVERS

Collateral Quality: The trust is collateralized by approximately $221 million of private student loans as of March 2016. The loans were originated under MEFA's Student Loan Program. The projected lifetime defaults are expected to range between 9% - 12% of the initial pool balance. A recovery rate of 35% was applied, which was based on data provided by the issuer.

Credit Enhancement (CE): CE is provided by overcollateralization (the excess of trust's asset balance over bond balance) and excess spread. Total parity ratio has increased slightly to 119.55% (March 2016) from 119.47% (March 2015). The trust just started releasing excess cash, since it has reached its release parity threshold of 119.5%.

Liquidity Support: Liquidity support is provided by a debt service reserve fund (DSRF) sized at the greater of 2% of the current bond balance and 1% of the initial bond balance. As of March 2016, the DSRF has a balance of $3,933,900.

Servicing Capabilities: Xerox Education Services, LLC (Xerox-ES) is responsible for the day-to-day servicing of the loans in the trust. Fitch believes Xerox-ES is an acceptable servicer of student loans due to their long history of servicing these loans.

RATING SENSITIVITIES

As Fitch's base case default proxy is derived primarily from historical collateral performance, actual performance may differ from the expected performance, resulting in higher loss levels than the base case. This will result in a decline in CE and remaining loss coverage levels available to the bonds and may make certain bond ratings susceptible to potential negative rating actions, depending on the extent of the decline in coverage. Fitch will continue to monitor the performance of the trust.

DUE DILIGENCE USAGE

No third-party due diligence was provided or reviewed in relation to this rating action.