Moody's Downgrades Five Tranches of Notes from Access Group Inc. Federal Student Loan Asset-Backed Notes

Strategic Insights -

Moody's Investors Service has downgraded five tranches of notes from Access Group Inc. Federal Student Loan Asset-Backed Notes, backed by student loans originated under the Federal Family Education Loan Program (FFELP) that are guaranteed by the US government for a minimum of 97% of defaulted principal and accrued interest. The rating action reflects updated performance of the transaction and updated expected loss on the tranches across cash flow scenarios.

Key Takeaways:

  • Moody's downgraded five tranches of notes from Access Group Inc. Federal Student Loan Asset-Backed Notes, with the Senior Ser. 2002-1 Cl. A-3 tranche being downgraded to Ba2 from Ba1.
  • The securitization is backed by student loans originated under the Federal Family Education Loan Program (FFELP) that are guaranteed by the US government for a minimum of 97% of defaulted principal and accrued interest.
  • The rating action reflects updated performance of the transaction and updated expected loss on the tranches across cash flow scenarios, with a quantitative analysis of 28 cash flow scenarios considering losses that highly rated securities incur in each scenario.
  • Only five classes of notes were affected by the rating action, with no actions taken on the other rated classes in this deal.
  • The principal methodology used in these ratings was "FFELP Student Loan Securitizations" published in December 2024.
  • Factors that could lead to an upgrade or downgrade of the ratings include changes in paydown speed, credit enhancement, and US Department of Education guarantees.

Statistics:

  • Five tranches of notes were downgraded by Moody's Investors Service.
  • The Senior Ser. 2002-1 Cl. A-3 tranche was downgraded to Ba2 from Ba1.
  • The expected loss was updated across 28 cash flow scenarios, with the highest expected loss.
  • The US government guarantees at least 97% of principal and accrued interest on defaulted loans.
  • The rating action reflects updated performance of the transaction and updated expected loss on the tranches across cash flow scenarios.

Sources:

  • Moody's, "Moody's Ratings," August 7, 2024.
  • Moody's, "FFELP Student Loan Securitizations," published in December 2024.
  • Moody's Ratings Methodologies, available at https://ratings.moodys.com/rmc-documents/434387.