Fitch Rates NELNET Student Loan Corporation-2 Notes.Business Editors NEW YORK--(BUSINESS WIRE)--June 2, 2000 Fitch rates the following NELNET NELNET National Education Loan Network student loan asset-backed taxable series 2000 auction rate notes: Ratings for New Issuance:
--$50,000,000 senior class 2000A-1, 'AAA',
--$50,000,000 senior class 2000A-2, 'AAA',
--$50,000,000 senior class 2000A-3, 'AAA',
--$50,000,000 senior class 2000A-4, 'AAA',
--$50,000,000 senior class 2000A-5, 'AAA',
--$50,000,000 senior class 2000A-6, 'AAA',
--$50,000,000 senior class 2000A-7, 'AAA',
--$75,000,000 senior class 2000A-8, 'AAA',
--$75,000,000 senior class 2000A-9, 'AAA',
--$75,000,000 senior class 2000A-10, 'AAA',
--$75,000,000 senior class 2000A-11, 'AAA',
--$100,000,000 senior class 2000A-12, 'AAA',
--$100,000,000 senior class 2000A-13, 'AAA',
--$100,000,000 senior class 2000A-14, 'AAA',
--$50,000,000 senior class 2000B-1, 'A'.
The ratings are based on the quality of the collateral; the reserve fund, initially sized at 75 basis points of the aggregate principal amount of notes outstanding with a minimum of $500,000; the ability of the transaction to pass stressful cash flow tests at each rating level; and the sound legal structure. In addition, the ratings on the senior notes are based on the 5.0% subordination provided by the subordinated notes. The ratings reflect the ability of the trust estate to redeem bonds at maturity and pay accrued interest Accrued Interest The interest that has accumulated on a bond since the last interest payment up to but not including the settlement date. There are two methods for calculating accrued interest: 1) 360-day year method, used for corporate and municipal bonds. . 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 bondholders to successfully remarket their bonds at an auction now or in the future. At closing, the trust will purchase student loans totaling $765 million in principal balance plus accrued interest. There will be approximately a $222 million deposited into the acquisition fund at closing that will be used to purchase additional student loans into the trust within six months. If additional student loans are not purchased within the six-month time period, the proceeds in the acquisition fund will be used to redeem outstanding notes. The transaction will utilize a revolving period in which principal receipts will be used to purchase additional student loans into the trust. The revolving period will be in effect until June 1, 2003 and may be extended with rating agency confirmation. The interest rate on the 2000A-1 notes will be determined by an auction occurring every 7-days, and for the remaining series 2000 notes, by an auction occurring every 28-days. Interest will be calculated on a 360-day basis and paid on the first business day following the end of an auction. The legal final maturity on these classes of notes is June 1, 2030. The collateral securing the notes consists entirely of 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 ) student loans. Depending on the origination Origination The process through which a mortgage lender creates a mortgage secured by some amount of the mortgagor's real property. Notes: Also known as loan origination, everyone must go through the origination process when securing a mortgage for a piece of real date, these loans are guaranteed up to 98% and 100% of principal and accrued interest by an eligible guarantor guarantor n. a person or entity that agrees to be responsible for another's debt or performance under a contract, if the other fails to pay or perform. (See: guarantee) GUARANTOR, contracts. He who makes a guaranty. 2. and reinsured by the U.S. Department of Education. NELNET will be the master servicer of the student loans and has entered into sub-servicing agreements with UNIPAC and InTuition intuition, in philosophy, way of knowing directly; immediate apprehension. The Greeks understood intuition to be the grasp of universal principles by the intelligence (nous), as distinguished from the fleeting impressions of the senses. , who will perform all servicing functions on the student loans. NELNET Student Loan Corporation-2 is a bankruptcy remote A company within a corporate group is said to be bankruptcy remote when the solvency of that company does not affect any other company in the group, particularly any holding company or subsidiary company of the bankruptcy remote vehicle. , limited purpose corporation and is a wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. of NELnet, Inc. PaineWebber Incorporated is the underwriter underwriter n. a company or person which/who underwrites an insurance policy, issue of corporate securities, business, or project. (See: underwrite) UNDERWRITER, insurances. One who signs a policy of insurance, by which he becomes an insurer. on this transaction. |
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