OREANDA-NEWS. Fitch Ratings rates Navient Student Loan Trust 2016-5 as follows:

--$1,008,000,000 floating rate class A notes 'AAAsf'; Outlook Stable.

KEY RATING DRIVERS

U. S. Sovereign Risk: The trust collateral comprises Federal Family Education Loan Program (FFELP) loans, 100% of which are rehab loans, with guaranties provided by eligible guarantors and reinsurance provided by the U. S. Department of Education (ED) for at least 97% of principal and accrued interest. The U. S. sovereign rating is currently 'AAA'/Stable Outlook.

Collateral Performance: Fitch assumes 48.25% base case default rate and 100% under 'AAA' credit stress scenario. The claim reject rate is assumed to be 0.5% in base case and 3.0% in 'AAA' case. Fitch applies the standard default timing curve, CDR and prepayment assumptions for rehab FFELP loans in its cash flow analysis. Current level of deferment, forbearance and IBR are 5.7%, 20.6%, and 15.8% respectively, which are used as the starting point in cash flow modelling. Subsequent declines or increases are modelled as per criteria. The borrower benefit is assumed to be 0%.

Basis and Interest Rate Risk: Fitch applies its standard basis and interest rate stresses to this transaction as per criteria.

Payment Structure: Cash flow scenarios for the 2016-5 notes were satisfactory under 'AAAsf' stress using Fitch's Student Loans ABS cash flow model (SLABS). Total credit enhancement (CE is provided by overcollateralization and excess spread' and at closing, total parity is expected to be 104.60%. Liquidity support for the 2016-5 notes is provided by a reserve fund sized at $38,107,928 million to be funded at closing with note proceeds, with a specified reserve requirement of 3.75% on any distribution date prior to Dec. 25, 2017, and 1.5% for any distribution date after Dec. 25, 2017 but prior to June 25, 2019. Thereafter, the requirement will be the greater of 0.25% of outstanding pool balance and 0.10% of the initial pool balance. Excess spread must build to the greater of: 5.5% of the adjusted pool balance and $5 million before excess cash may be released from the trust.

Maturity Risk: Fitch's SLABS cash flow model indicates that the notes are paid in full on or prior to the legal final maturity of June 25, 2065 in AAA maturity stress scenario.

Operational Capabilities: Navient Solutions, Inc. (Navient) is the servicer, servicing 100% of the 2016-5 portfolio. Navient is also the administrator. Fitch deems Navient to be an acceptable servicer of FFELP loans.

RATING SENSITIVITIES

Since FFELP student loan ABS rely on the U. S. government to reimburse defaults, 'AAAsf' FFELP ABS ratings will likely move in tandem with the 'AAA' U. S. sovereign rating. Aside from the U. S. sovereign rating, defaults and basis risk account for the majority of the risk embedded in FFELP student loan transactions. Additional defaults and basis shock beyond Fitch's published stresses could result in future downgrades. Likewise, a build-up of credit enhancement driven by positive excess spread given favorable basis factor conditions could lead to future upgrades.

Key Rating Drivers and Rating Sensitivities are further described in the updated presale report titled 'Navient Student Loan Trust 2016-5', dated July 25, 2016 available on www. fitchratings. com, or by clicking on the link.

DUE DILIGENCE USAGE

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