Fitch Assigns Ratings to Alaska Student Loan Corp.'s 2004 Bonds.

Business Editors

NEW YORK--(BUSINESS WIRE)--May 19, 2004

Fitch Ratings assigns the following ratings to the new Education Loan Revenue Bonds issued by the Alaska Student Loan Corporation (ASLC):

-- Senior series 2004A-1 'AAA';

-- Senior series 2004A-2 'AAA';

-- Senior series 2004A-3 'AAA'.

Fitch also affirms the following ratings to the outstanding education loan revenue bonds issued by ASLC:

-- Senior series 2002A 'AAA';

-- Subordinate series 2002B 'A';

-- Senior series 2003A-1 'AAA';

-- Senior series 2003A-2 'AAA'.

The ratings are based on the quality of the student loan portfolio, which contains both private student loans and loans originated under the Federal Family Education Loan Program (FFELP), and the credit enhancement provided in and sound legal structure of the issuing trust. The ratings reflect the ability of the trust to pay bond principal at the legal final maturity date and timely interest when due. The ratings do not address the ability of the issuer to successfully auction or redeem bonds at on any auction date.

The series 2004 bonds are issued under a master indenture of trust dated June 1, 2002, and third supplemental indenture dated April 1, 2004, between ASLC and Zions First National Bank, as trustee. The series 2004A-1 and 2004A-2 bonds are tax-exempt 35-day auction-rate securities that pay interest semi-annually on each June 1 and Dec. 1, commencing Dec. 1, 2004; are subject to optional redemption and acceleration as described in the indenture and supplement; and have a legal final maturity date of April 1, 2044. The series 2004A-3 bonds are fixed-rate bonds that pay interest semiannually on each June 1 and Dec 1, commencing Dec. 1, 2004, and are subject to the following maturity schedule and interest rates:

Due Date (June)         Principal Amount ($)        Interest Rate
2011                    6,285,000                   5.25%
2012                    7,020,000                   5.25%
2013                    2,400,000                   5.25%
2014                    3,865,000                   5.25%
2016                    1,950,000                   5.25%
2017                      495,000                   5%

The security for the bonds includes private loans originated under the Alaska Advantage Loan Program, which provides low-interest loans to Alaskans pursuing education and training at a postsecondary level and to other qualified individuals attending postsecondary institutions within the state of Alaska. There are four types of loans available under the program: Supplemental Education Loans, Family Education Loans, Teacher Education Loans and ASL Consolidation Loans. The collateral for the bonds also includes FFELP student loans which, depending upon origination date, are guaranteed up to 98% and 100% of principal and accrued interest by an eligible guarantor and re-insured by the U.S. Department of Education.

At closing, the trust's ratio of total asset to liabilities, or overall parity, is approximately 131% and senior assets to liabilities, or senior parity, is approximately 143%, thus providing a significant level of overcollateralization. ALSC may withdraw excess available funds from the trust only if total and senior parity is maintained at 101.5% and 107%, respectively, and with rating agency confirmation. Additionally, the trust maintains a reserve account in an amount equal to no less than 2% of the principal amount of bonds outstanding, with a floor of $500,000. The Alaska State Legislature is under moral obligation to make an annual appropriation of funds to maintain the reserve requirement. Also, under state law, for borrowers whose accounts are at least 180 days past due, ALSC may garnish wages, withhold the renewal of Alaska occupational licenses, seize the Alaska Permanent Fund Dividend, and issue a lien against real property.

In determining that the series 2004 bonds were eligible for 'AAA' and 'A' ratings, Fitch required various cash flow stress scenarios to be passed. These scenarios assumed, among other things, that the student loan collateral default at a blended claim rates of 43.6% and 31.9%, respectively, for the 'AAA' and 'A' scenarios.

Servicing of the student loans is handled by the Alaska Commission on Postsecondary Education, the parent of ASLC.

ASLC is a public corporation and governmental instrumentality within the Department of Education and Early Development of the State of Alaska, but has a legal existence independent of and separate from the State. ASLC was created in 1987 pursuant to Alaska Statutes 14.42.100 through 14.42.990, as amended, which authorizes the Corporation, among other things, to acquire, purchase and make commitments to purchase loans made to students or certain family members of students and to loan money to students or certain family members of students for the purpose of assisting students in obtaining a postsecondary education, and to issue revenue bonds and notes to obtain funds to purchase or make such loans.

ASLC is governed by a board of directors that consists of two members of the Alaska Commission on Post-Secondary Education (its parent), the Commissioner of Revenue, the Commissioner of Administration, and the Commissioner of Community and Economic Development. The members of the Board who represent the Commission serve on the Board at the pleasure of the Governor, subject to their incumbency on the Commission. The supervision of the administration of ASLC is delegated to the Executive Officer of the Corporation, who is also the Executive Director of the Commission. The staff of the Commission also serves as staff of ASLC. ASLC does not have the authority to hire staff independently. The Commission is an eligible lender under the federal Higher Education Act of 1965.