Fitch Rates PHEAA Student Loan Revenue Notes, Series 2006-2.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 has assigned ratings to the following senior floating-rate and subordinate auction-rate student loan revenue notes issued by Pennsylvania Higher Education Assistance Agency The Pennsylvania Higher Education Assistance Agency, or "PHEAA", headquartered in Harrisburg, Pennsylvania, with regional offices throughout the state , is the quasi-governmental agency that administers several State higher education student financial aid programs. (PHEAA PHEAA Pennsylvania Higher Education Assistance Agency ), series 2006-2: --$269,125,000 senior class A-1 'AAA'; --$158,390,000 senior class A-2 'AAA'; --$299,985,000 senior class A-3 'AAA'; --$ 22,500,000 subordinate class B 'A'. The ratings are based on the quality of the FFELP FFELP Federal Family Education Loan Program consolidation loan collateral; the credit enhancement within the trust; the ability of the transaction to pass cash flow stress scenarios at each rating level; and the legal structure. 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 the indenture trustee to auction the collateral pool prior to the stated maturity of the notes. Credit enhancement for the trust consists of the reserve account which is sized to the greater of 0.25% of the pool balance as of the close of business on the last day of the related collection period, or 0.15% of the initial pool balance. In addition, the senior class A notes benefit from 2.6% subordination provided by the subordinate class B notes. The series 2006-2 notes are issued pursuant to a Trust Indenture, dated as of Nov. 1, 2006 between PHEAA and the trustee, Manufacturers and Traders Trust Company, (Harrisburg, Pennsylvania). The bond proceeds will be used to acquire or originate student loans, make initial deposits into the reserve account and the capitalized interest account, and pay costs of issuance. The transaction has a senior-subordinate structure with four classes of notes. Interest on the senior class A-1, A-2 and A-3 is indexed to the three-month London Interbank Offered Rate London Interbank Offered Rate A short-term interest rate often quoted as a 1,3,6-month rate for U.S.dollars. (LIBOR LIBOR See: London Interbank Offered Rate LIBOR See London interbank offered rate (LIBOR). ) plus a spread payable quarterly beginning Jan. 25, 2007. Interest on the subordinate class B is based on the results of 28-day auctions payable on the first business day following each auction period beginning Dec. 15, 2006. Note principal is payable sequentially, until the stepdown date (the earlier of the January 2013 distribution date and the date on which no senior class A notes are outstanding) after which principal will be distributed pro rata among the senior class A and subordinate class B notes so long as 100% total parity is maintained. The final maturity date for the series 2006 notes is Oct. 25, 2042. PHEAA, a public corporation and governmental instrumentality Instrumentality Notes issued by a federal agency whose obligations are guaranteed by the full-faith-and-credit of the government, even though the agency's responsibilities are not necessarily those of the US government. , 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 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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