Fitch Rates Panhandle-Plains Higher Education Authority Revs.

NEW YORK -- Fitch rates the following new issuance student loan revenue bonds by Panhandle-Plains Higher Education Authority (Panhandle-Plains):

-- $64,775,000 senior series 2005A-3 'AAA'.

Fitch assigns 'AAA' ratings to the senior series 2005A-3 bonds. The ratings are based on the quality of the student loan portfolio consisting entirely of Federal Family Education Loan Program (FFELP) loans; the reserve fund; the ability of the transaction to pass stressful cash flow tests at each rating level; and the sound legal structure. The reserve fund is sized at the sum of 7.5% of the aggregate principal amount of outstanding series 1993 and 1995A bonds, 2.5% of the aggregate principal amount of outstanding series 1997, 1998A, 1998B, and 2002A-1 bonds, and 1.0% of the series 2005A-3 bonds with a $500,000 minimum. In addition, the 'AAA' ratings on the senior series 2005A-3 bonds are based on the 6.15% overcollateralization of the trust. The ratings address the ability of the trust to redeem bonds at maturity and pay timely interest. The ratings do not address the ability of auction-rate bondholders to successfully redeem their bonds at an auction now or in the future.

The series 2005A-3 bonds are issued under the fourth supplement dated April 1, 2005 to the amended and restated trust indenture dated April 1, 2000. The series 2005A-3 bond proceeds will be used to acquire Federal Family Education Loan Program (FFELP) student loans, refund certain of the authority's student loan obligations, fund the reserve fund, and pay costs and fees associated with issuance.

The series 2005A-5 are tax-exempt, 35-day auction-rate securities with interest payable semiannually, beginning July 5, 2005. The bonds have a legal final maturity dates on Jan. 1, 2040.

The collateral securing the bonds consists entirely of FFELP student loans. The FFELP loans are guaranteed 100% or 98% by an eligible guarantor and re-insured by the U.S. Department of Education (ED) depending on their disbursement date.

The issuer is Panhandle-Plains Higher Education Authority, Inc., a 501(c)(3) nonprofit corporation originally created under the Texas Non-Profit Corporation Act in May 1969 under the name, The Opportunity Plan Foundation, Inc. This corporation was reorganized on Aug. 26, 1979 and its articles of incorporation were amended to change its name and purpose. The authority is authorized to provide funds for the acquisition of guaranteed student loans made to students attending postsecondary educational institutions and provide procedures for the servicing of the guaranteed student loans. All of the authority's revenues are to be used to purchase student loans. The authority is able to issue tax-exempt debt under its 150(d) designation from the Internal Revenue Code.

Panhandle-Plains Management and Servicing Corp., a Texas for-profit corporation, and ACS Education Services will service the loans in the portfolio.