Fitch Ratings affirms the senior notes at 'AAAsf' and upgrades the
subordinate notes to 'Asf' from 'BBB-sf' issued by Nelnet Student Loan
Trust 2007-1. The Stable Outlook is maintained on both classes.
KEY RATING DRIVERS
High Collateral Quality: The collateral consists of 100% 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 reinsurance provided by the
U.S. Department of Education (ED) for at least 97% of principal and
accrued interest. Fitch affirmed at 'AAA' and assigned a Stable Outlook
to the U.S. sovereign rating on March 24, 2014.
Sufficient Credit Enhancement (CE): CE is provided by
overcollateralization (OC; the excess of trust's asset balance over bond
balance), excess spread, and for the Class A notes, subordination
provided by the Class B notes. Current senior and total parity for
Nelnet Student Loan Trust 2007-1 is at 104.86% and 100.04% respectively.
The trust is currently releasing cash as long as the OC $657,775 is
Adequate Liquidity Support: Liquidity support is provided by a Debt
Service Reserve Fund currently sized at $3,623,145.56.
Acceptable Servicing Capabilities: National Education Loan Network
acting as master servicer, and Nelnet, Inc. as subservicer are
responsible for the servicing of the trust. Fitch believes both National
Education Loan Network and Nelnet, Inc. to be acceptable servicers of
FFELP student loans.
Since the FFELP student loan ABS relies 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
Fitch has taken the following rating actions:
Nelnet Student Loan Trust 2007-1:
--Class A-1affirmed at 'AAAsf'; Outlook Stable;
--Class A-2 1affirmed at 'AAAsf'; Outlook Stable;
--Class A-3 1affirmed at 'AAAsf'; Outlook Stable
--Class A-41affirmed at 'AAAsf'; Outlook Stable;
--Class B1 upgraded to 'Asf'' from 'BBB-sf'; Outlook Stable.
--Class B2 upgraded to 'Asf'' from 'BBB-sf'; Outlook Stable.
Additional information is available at 'www.fitchratings.com'.
Applicable Criteria and Related Research:
--'Global Structured Finance Rating Criteria' (May 24, 2013);
--'Rating U.S. Federal Family Education Loan Program Student Loan ABS
Criteria' (May 17, 2013);
--'Nelnet Student Loan Trust 2012-1 (US ABS)' (May 13, 2008);
--'Representations, Warranties, and Enforcement Mechanisms in Global
Structured Finance Transactions' (April 17, 2012).
Representations, Warranties, and Enforcement Mechanisms in Global
Structured Finance Transactions -- Amended
Nelnet Student Loan Trust 2012-1 - Appendix
Nelnet Student Loan Trust 2012-1 (US ABS)
Rating U.S. Federal Family Education Loan Program Student Loan ABS
Criteria -- Amended
Global Structured Finance Rating Criteria
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DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING
THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS.
AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE '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. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE
RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR
RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY
CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH
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