Fitch Rates Student Ln Finance Assoc Educ Ln Revenue Bonds.

Business Editors

NEW YORK--(BUSINESS WIRE)--July 26, 2000

Fitch rates the following bonds issued by the Student Loan Finance Association (SLFA):

Ratings for new issuance:

-- $50,000,000 tax-exempt education loan revenue bonds, 2000

series A-1, `AAA';

-- $10,000,000 taxable education loan revenue bonds, 2000 series

A-2, `AAA'.

The following ratings have been affirmed:

-- $45,000,000 tax-exempt education loan revenue bonds, 1998

series A-1, `AAA';

-- $45,000,000 tax-exempt education loan revenue bonds, 1998

series A-2, `AAA';

-- $60,000,000 tax-exempt education loan revenue bonds, 1998

series A-3, `AAA'.

Fitch rates the Student Loan Finance Association senior series 2000 A-1 and 2000 A-2 education loan revenue bonds `AAA'. In addition, Fitch affirms the `AAA' ratings on SLFA's outstanding bonds as indicated above. All of the debt is issued under an indenture of trust adopted July 1, 1998, as amended. The series 2000 bonds are issued under a Second Supplemental Indenture effective July 1, 2000. The series 2000 bonds will be used to finance Federal Family Education Loan Program (FFELP) guaranteed student loans, to acquire FFELP guaranteed student loans, to fund the reserve fund, and to pay costs and fees associated with issuance.

The ratings are based on the collateral quality, 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 2.0% of all the outstanding series bonds, with a $500,000 minimum. After issuance, there will be approximately $4.2 million held in the reserve fund. The ratings on the senior bonds are also based upon an additional 4% overcollateralization within the trust. The ratings address the ability of the trust to pay bonds at maturity and pay accrued interest on each payment date. 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 2000A-2 bonds are taxable, 28-day auction rate securities with interest payable monthly, beginning Aug. 24, 2000 and calculated based on actual number of days elapsed during a 360-day year (Actual/360). The series 2000A-1, 1998A-1, 1998A-2, and 1998A-3 bonds are tax-exempt, 35-day auction rate securities with interest payable semiannually, June 1 and Dec. 1, and calculated based on the actual number of days elapsed during a 360-day year (Actual/360). The first interest payment date for the series 2000A-1 bonds is Dec. 1, 2000. The series 2000 bonds have a legal final maturity of Dec. 1, 2034 and the series 1998A-1, 1998A-2, and 1998A-3 bonds have a legal final maturity of Dec. 1, 2002, Dec. 1, 2005 and Dec. 1, 2032, respectively.

The collateral securing the bonds consists 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.

NELA (Northwest Education Loan Association) is the primary guarantor and SLFA services, AFSA Data Corp., and Sallie Mae Servicing Corp. are the servicers for the student loan portfolio.

Student Loan Finance Association, organized and existing under the laws of the state of Washington, is a non-profit 501(c) 3 corporation. SLFA receives, disburses and administers funds exclusively for educational purposes and makes loans to students attending eligible post-secondary institutions.

William R. Hough & Co. is the lead underwriter for the transaction.

Fitch is an international rating agency that provides global capital market investors with the highest quality ratings and research. Dual headquartered in New York and London with a major office in Chicago, Fitch rates entities in 75 countries and has some 1,100 employees in more than 40 local offices worldwide. The agency, which is a combination of Fitch IBCA and Duff & Phelps Credit Rating Co., provides ratings for Financial Institutions, Insurance, Corporates, Structured Finance, Sovereigns and Public Finance Markets worldwide.