Fitch Rates PHEAA Student Loan Revenue Bonds, Series 2007 MM NN.

NEW YORK -- Fitch Ratings has assigned ratings to the following student loan revenue bonds issued by the Pennsylvania Higher Education Assistance Agency (PHEAA):

--$69,750,000 Senior Subseries MM-1 'AAA';

--$50,000,000 Senior Subseries MM-2 'AAA';

--$50,000,000 Senior Subseries MM-3 'AAA';

--$50,000,000 Senior Subseries MM-4 'AAA';

--$50,000,000 Senior Subseries MM-5 'AAA';

--$69,750,000 Senior Subseries MM-6 'AAA';

--$10,500,000 Subordinate Series NN 'A+';

The ratings are based on the quality of the student loan portfolio, the credit enhancement provided, and the sound legal structure of the trust. The collateral consists of approximately 98% Federal Family Education Loan Program (FFELP) student loans and approximately 2% federally guaranteed health education assistance loans (HEALs). The senior bonds have 5.68% credit enhancement in the form of subordination and overcollateralization, and excess spread over time. In addition, the trust benefits from a debt service reserve account in the form of a surety bond provided by Ambac Assurance Corporation in the amount of $53.2 million. The surety bond provides liquidity to the trust by guaranteeing the timely payment of interest and principal when due. Fitch rates Ambac Assurance Corporation's insurer financial strength 'AAA'.

The ratings address the ability of the trust to pay bond principal at maturity and 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 bondholders to successfully remarket their bonds at an auction now or in the future.

The series MM and NN bonds are issued pursuant to a Trust Indenture, dated as of Aug. 1, 1997, as further supplemented by the Thirty-Fifth Supplemental Trust Indenture, dated as of June 1, 2007. The bond proceeds will be deposited to the loan fund to acquire or originate student loans, and pay costs of issuance.

The subseries MM-6 bonds are taxable, 7-day auction-rate securities, while the remaining Subseries MM and NN classes are all 28-day auction-rate securities. The legal final maturity date for the series MM and NN bonds is June 1, 2047.

A public corporation and governmental instrumentality, PHEAA is organized under the laws of the Commonwealth of Pennsylvania. PHEAA is authorized to issue bonds or notes for the purpose of purchasing, making or guaranteeing loans to students or parents.

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.