OREANDA-NEWS. Fitch Ratings affirms the Nelnet Student Loan Trust Series 2013-5 senior notes at 'AAAsf' and upgrades the subordinate notes to 'A+sf' from 'Asf'. The Rating Outlook remains Stable.

KEY RATING DRIVERS

The trust collateral is comprised of 100% of rehabilitated Federal Family Education Loan Program (FFELP) loans. The credit quality of the trust collateral is high, in Fitch's opinion, based on the guarantees provided by the transaction's eligible guarantors and at least 97% reinsurance of principal and accrued interest provided by the U.S. Department of Education (ED). Fitch currently rates the U.S. 'AAA' with a Stable Outlook.

Sufficient Credit Enhancement: Credit enhancement (CE) is provided by overcollateralization and excess spread. Class A will have subordination provided by class B. Total parity remains at 101.52%, and senior parity increased to 104.80%. Excess cash may be released once the overcollateralization builds to the greater of 1.50% of the adjusted pool balance and $2 million. The trust is current releasing since the specified overcollateralization amount has been satisfied.

Adequate Liquidity Support: Liquidity support is provided by a debt service reserve fund sized at the greater of 0.25% of the pool balance and $408,000. The debt service reserve fund is at $732,380. Additionally, the trust currently benefit from a capitalized interest fund of $6 million that will reduce based on a schedule to zero by June 2017.

Acceptable Servicing Capabilities: Day-to-day servicing is provided by Nelnet, Pennsylvania Higher Education Assistance Agency (PHEAA), Xerox Education Services Inc. (XES). In Fitch's opinion, all servicers are acceptable servicers of FFELP student 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 buildup of credit enhancement driven by positive excess spread given favorable basis factor conditions could lead to future upgrades.

DUE DILIGENCE USAGE

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

Fitch has taken the following rating actions:

Nelnet Student Loan Trust Series 2013-5:
--Class A affirmed at 'AAAsf'; Outlook Stable;
--Class B upgraded to 'A+sf' from 'Asf'; Outlook Stable.