DBRS Finalizes Provisional Ratings on Navient Student Loan Trust 2016-3

DBRS, Inc. (DBRS) has today finalized its provisional ratings of AAA (sf) on the Class A Notes (Notes) issued by Navient Student Loan Trust 2016-3 (Navient 2016-3). The DBRS ratings of the Notes address the timely payment of interest and the full payment of principal in accordance with the terms and conditions of the Navient 2016-3 transaction documents.

The finalized ratings are based on DBRS’s review of the following analytical considerations:

-- The transaction’s form and sufficiency of available credit enhancement.
-- The ability of the master servicer and the subservicer to perform collections on the collateral pool and other required activities.
-- The legal structure and legal opinions that will address the true sale of the student loans, the non-consolidation of the trust, and that the trust has a valid first-priority security interest in the assets and the consistency with the DBRS “Legal Criteria for U.S. Structured Finance” methodology.

Transaction Description:
-- $245,000,000 Floating-Rate Class A-1 Notes at AAA (sf)
-- $141,000,000 Floating-Rate Class A-2 Notes at AAA (sf)
-- $375,000,000 Floating-Rate Class A-3 Notes at AAA (sf)

The collateral securing Navient 2016-3 consists of student loans originated pursuant to the Federal Family Education Loan Program, which are guaranteed to at least 97% of principal plus accrued interest. Navient Solutions will service 26.5% of the loans and oversee the subservicer, Pennsylvania Higher Education Assistance Agency, on its subservicing of its related 73.5% of the loans.

Each class of Notes bears interest based on one-month LIBOR (1mL) plus a margin that will be paid on a monthly basis beginning on the distribution date in July 2016. Principal will be paid sequentially to the Class A-1 Notes, the Class A-2 Notes and the Class A-3 Notes, in that order, until each such class of Notes is paid in full.

Notes:
All figures are in U.S. dollars unless otherwise noted.

The applicable methodology is Rating U.S. Federal Family Education Loan Program Securitizations, which can be found on our website under Methodologies.

The rated entity or its related entities did participate in the rating process. DBRS had access to the accounts and other relevant internal documents of the rated entity or its related entities.

Please see the attached appendix for additional information regarding sensitivity of assumptions used in the rating process.