Fitch Rates Educational Loan Company Trust I, Series 2006-1.NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- Fitch assigns ratings to the following auction rate student loan-backed notes issued by Educational Loan Company Trust, series 2006-1: --$80,000,000 class A-1, Senior Student Loan-Backed Auction- Rate Notes 'AAA'; --$100,000,000 class A-2, Senior Student Loan-Backed Auction-Rate Notes 'AAA'; --$20,000,000 class B-1, Subordinate Student Loan-Backed Notes Auction-Rate 'A'; The ratings are based on the quality of the student loan portfolio, the level of credit enhancement Credit Enhancement A method whereby a company attempts to improve its debt or credit worthiness. Notes: Credit enhancements take many different forms. An example of a credit enhancement would be conversion rights added on to a debt instrument in order to lower the issuing provided, and the sound legal structure of the transaction. The ratings address the ability of the trust to pay note principal 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 auction rate bondholders to successfully redeem their bonds at an auction now or in the future. Credit enhancement for the trust consists of the excess spread, the reserve fund, and the capitalized interest Capitalized interest Interest that is not immediately expensed, but rather is considered as an asset and is then amortized through the income statement over time. In the context of project financing, interest that is paid by additional borrowing. account. The reserve fund requirement is 1.50% of the bonds outstanding, with a floor of $750,000. The reserve fund will be funded at closing with a deposit of $3 million with a floor of $750,000; the capitalized interest account is funded at closing with $3 million. In addition, the senior notes benefit from 9.36% subordination provided by the subordinate notes. The series 2006-1 notes are taxable, 28-day auction rate notes, with interest paid monthly. The legal final maturity date for the notes is August 1, 2041. The series 2006-1 notes are being offered and sold only to qualified institutional buyers in compliance with Rule 144A Rule 144A A Securities & Exchange Commission rule modifying a two-year holding period requirement on privately placed securities to permit qualified institutional buyers to trade these positions among themselves. . The collateral securing the notes are consolidation loans originated under the Federal Family Education Loan Program The Federal Family Education Loan Program (FFELP) is a United States Department of Education program that provides for private organizations to market, originate, and service federally guaranteed loans, such as Stafford and PLUS loans to students and their parents. (FFELP FFELP Federal Family Education Loan Program ). The loans are guaranteed at least 97% of principal and accrued interest by an eligible guarantor(s), depending on loan origination date, and reinsured by the U.S. Department of Education up to the same amounts. Great Lakes Educational Loan Services Inc. is the servicer of the loan portfolio. Fitch's rating definitions and the terms of use Terms of Use are rules set up by the owner of an intellectual property or service to govern how they may be legally used. In many cases, terms of service are used as a contractual agreement between a company and users of a service they provide. 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 Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental are also available from the 'Code of Conduct' section of this site. |
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