Fitch Revises KeyCorp 2001-A Group II to 'AAA'

2008-06-20 22:12:09 -

- Fitch revises the ratings on KeyCorp 2001-A Group II as listed below. The revision is based upon the performance of the trust's underlying assets, current credit enhancement as well as the financial and legal structure. The transaction also benefits from a financial guaranty provided by MBIA Insurance Corp. (MBIA). Initially, classes in the trust were rated 'AAA' based solely on the financial guaranty provided by MBIA Insurance Corp. Fitch downgraded MBIA Insurance Corp's insurer financial strength (IFS) to 'AA'/Outlook Negative on April 4, 2008.

Based upon Fitch's review of the transaction's performance and credit enhancement absent the MBIA policy, Fitch has determined that a revised rating of 'AAA' is appropriate for the following bonds. Even though this revised rating does not rely on MBIA's guaranty, MBIA still remains obligated to insure timely interest and ultimate principal payments to the bondholders.

Consistent with Fitch's policy in other structured finance sectors, in the event that a trust's underlying rating is higher than the insurer's current IFS rating, the Fitch rating will be based on the underlying rating rather than the insurer's IFS rating.

For more information please refer to 'Fitch Downgrades MBIA's IFS to 'AA'; Outlook Negative', dated April 4, 2008, available on the Fitch Ratings web site at www.fitchratings.com

As a result of the review, Fitch has revised the ratings of the following class:

--KeyCorp 2001-A II-A-2 asset-backed notes 'AAA'.

The collateral securing 2001-A Group II consists of private student loans. A portion of the private loans are 100% guaranteed for principal and accrued interest by TERI. Credit enhancement consists of excess spread, over-collateralization, a reserve account with a minimum balance requirement of 3.0% and available excess from the Group I notes that finance FFELP collateral

Overall, collateral performance for the trust has been better than expectations from a net default and delinquency perspective. The excess spread generated by the trust has been sufficient to cover any losses and pay note principal to build credit enhancement. As a result, trust total asset to liability or parity ratio has remained at the release level of 100%.

KeyBank National Association is the master servicer for the transaction, with the loans subserviced by PHEAA (not rated by Fitch), Great Lakes Educational Loan Services, Inc.(rated Proficient for private student loan servicing by Fitch), and ACS (rated Proficient Plus for private student loan servicing by Fitch)

KeyBank N.A. has a Fitch Issuer Default Rating of 'A' and a short-term rating of 'F1'. KeyBank N.A. is a wholly owned subsidiary of KeyCorp. KeyBank N.A. provides banking services to consumers and commercial businesses, in addition to capital market services and trust and asset management services.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.

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