Fitch Rates Brazos Higher Education Authority Series 2007-1.

NEW YORK -- Fitch Ratings has assigned the following ratings to the new student loan-backed notes issued by Brazos Higher Education Authority, Inc. (BHEA), series 2007-1:

Ratings for new issuance:

--$100,000,000 senior series 2007 I-A-1 'AAA';

--$100,000,000 senior series 2007 I-A-2 'AAA';

--$100,000,000 senior series 2007 I-A-3 'AAA';

--$75,000,000 senior series 2007 I-A-4 'AAA';

--$75,000,000 senior series 2007 I-A-5 'AAA';

--$50,000,000 subordinate series 2007 I-B-1 'A'.

Ratings confirmed on existing debt:

--$200,473,000 senior series 2004 I-A-1 'AAA';

--$362,600,000 senior series 2004 I-A-2 'AAA';

--$70,000,000 subordinate series 2004 I-B-1 'A';

--$128,500,000 senior series 2005 I-A-1 'AAA';

--$200,000,000 senior series 2005 I-A-2 'AAA';

--$223,000,000 senior series 2005 I-A-3 'AAA';

--$240,000,000 senior series 2005 I-A-4 'AAA';

--$33,000,000 subordinate series 2005 I-B-1 'A';

--$225,550,000 senior series 2005 I-A-8 'AAA';

--$281,957,000 senior series 2005 I-A-9 'AAA';

--$272,393,000 senior series 2005 I-A-10 'AAA';

--$128,573,000 senior series 2005 I-A-11 'AAA';

--$324,759,000 senior series 2005 I-A-12 'AAA';

--$69,100,000 subordinate series 2005 I-B-2 'A';

--$278,105,000 senior series 2005 I-A-13 'AAA';

--$300,000,000 senior series 2005 I-A-14 'AAA';

--$192,000,000 senior series 2005 I-A-15 'AAA';

--$153,000,000 senior series 2005 I-A-16 'AAA';

--$50,000,000 subordinate series 2005 I-B-3 'A'

--$157,410,000 senior series 2006 I-A-1 'AAA';

--$296,650,000 senior series 2006 I-A-2 'AAA';

--$152,100,000 senior series 2006 I-A-3 'AAA';

--$214,535,000 senior series 2006 I-A-9 'AAA';

--$416,567,000 senior series 2006 I-A-10 'AAA';

--$15,650,000 senior series 2006 I-A-11 'AAA';

--$80,050,000 senior series 2006 I-A-12 'AAA';

--$80,050,000 senior series 2006 I-A-13 'AAA';

--$60,050,000 senior series 2006 I-A-14 'AAA';

--$30,050,000 senior series 2006 I-A-15 'AAA';

--$50,000,000 subordinate series 2006 I-B-1 'A';

--$50,000,000 subordinate series 2006 I-B-2 'A'.

The ratings are based on the quality of the student loan portfolio, the credit enhancement provided, and the sound legal structure. The collateral in the trust consists of 100% Federal Family Education Loan Program (FFELP) student loans. Credit enhancement for the trust consist of excess spread, and a reserve fund sized at the greater of 0.75% of the aggregate principal amount of the bonds outstanding or $1 million. In addition, the Senior Series notes benefit from approximately 6.4% subordination provided by the subordinate series notes in the trust.

The ratings address the ability of the trust to redeem notes at maturity and pay timely interest. The ratings do not address the ability of the trust to pay carry-over interest, nor do they address the ability of the auction-rate noteholders to successfully redeem their notes at an auction now or in the future.

The series 2007-1 Notes are issued pursuant to the Indenture of Trust, dated as of Oct. 1, 2004 and as further amended and supplemented by the Seventh Supplemental Indenture, dated as of June 1, 2007. The bond proceeds will be used to acquire FFELP student loans, make deposits into the reserve account, and pay issuance costs.

The senior series 2007 I-A-1 through 2007 I-A-5 notes and the subordinate series 2007 I-B-1 are taxable, 28-day auction-rate securities. Interest on the notes is payable on each auction rate distribution date, commencing July 2, 2007. The legal final maturity for the series 2007-1 notes is June 25, 2043.

As noted, the collateral securing the notes consists entirely of FFELP student loans. The FFELP loans are guaranteed at least 97% by an eligible guarantor and re-insured by the U.S. Department of Education (ED) depending on their disbursement date.

The issuer is Brazos Higher Education Authority, Inc., a nonprofit, 501(c)(3) corporation organized in 1975 under the Texas Non-Profit Corporation Act which also operates pursuant to Chapter 53, Texas Education Code on behalf of the City of Waco, Texas. Brazos issues tax-exempt debt under its 150(d) tax designation by the Internal Revenue Code as a qualified scholarship funding corporation. Brazos is also affiliated with Brazos Higher Education Service Corporation, Inc. and Brazos Student Finance Corp.

Brazos Higher Education Service Corporation, Inc. is the servicer with ACS Education Services, Inc., CFS-SunTech Servicing LLC, Great Lakes Educational Loan Services, Inc, Pennsylvania Higher Education Assistance Agency and Sallie Mae Servicing, acting as subservicers for the student loans.

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.