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Fitch Rts Brazos Higher Education Authority Student Ln Rev Bonds.

Business Editors

NEW YORK--(BUSINESS WIRE)--March 5, 2003

Fitch rates the following student loan revenue bonds issued by Brazos Higher Education Authority (Brazos):

Ratings for new issuance:

-- $35,000,000 student loan revenue bonds, senior series

2003A-1, 'AAA';

-- $22,300,000 student loan revenue bonds, senior series

2003A-2, 'AAA';

In addition, the following ratings are affirmed:
-- $41,400,000 student loan revenue refunding bonds, senior series 2002A-1, 'AAA';

-- $93,600,000 student loan revenue bonds, taxable senior series 2002A-2, 'AAA';

-- $15,000,000 student loan revenue bonds, taxable senior series 2002A-3, 'AAA';

-- $22,800,000 student loan revenue refunding bonds, senior series 2001A-1, 'AAA';

-- $35,000,000 student loan revenue bonds, subordinate series 2001B-1, 'A';


The ratings are based on the quality of the student loan portfolio consisting entirely of Federal Family Education Loan Program (FFELP) student loans; the credit enhancement provided and the sound legal structure. The ratings address the ability of the trust to pay 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 auction rate bondholders to successfully redeem their bonds at an auction now or in the future.

The series 2003A bonds are the fifth issuance under the third supplemental indenture dated as of Feb. 1, 2002 to the trust indenture, dated as of Oct. 15, 1992. The series 2003 bonds are being issued to acquire a FFELP student loan portfolio, refund a portion of Brazos' series 1992C bonds, fund the reserve fund, and pay costs and fees associated with issuance.

The series 2001A-1, 2003A-1 and 2003A-2 bonds are tax-exempt, 35-day auction rate securities with interest payable semiannually, beginning June 1, 2003. The legal final maturity date for the 2003A-1 bonds is December 1, 2037 and for the 2003A-2 bonds December 1, 2005 ($15,100,000), December 1, 2006 ($2,300,000) and May 1, 2009 ($4,900,000). The legal final maturity dates for the series 2001A-1 bonds are November 1, 2004 ($6.4 million), and December 1, 2036 ($35.0 million). The series 2002A-2 and 2002A-3 bonds are taxable, 28-day auction rate securities with interest payable monthly. The legal final maturity date for the series 2002A-2 and 2002A-3 bonds is Dec. 1, 2036.

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 Brazos Higher Education Authority, Inc., a nonprofit 501(c)(3) corporation organized in 1975 under the Texas Non-Profit Corporation Act and also operates pursuant to Chapter 53, Texas Education Code on behalf of the City of Waco, Texas. Brazos issues tax-exempt debt under its 150(d) tax status. Brazos is affiliated with Brazos Higher Education Service Corp., and Brazos Student Finance Corp. Fitch currently rates transactions by both Brazos Student Finance Corp. and Brazos Higher Education Authority, Inc.

Brazos Higher Education Service Corporation, Inc. is the Fitch-approved master servicer with AFSA Data Corporation, Great Lakes Higher Education Servicing, Inc., Pennsylvania Higher Education Assistance Agency, Sallie Mae Servicing Corporation, SunTech Inc. and UNIPAC Service Corporation acting as Fitch-approved subservicers.

The lead underwriter on this transaction is Salomon Smith Barney.
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Publication:Business Wire
Date:Mar 5, 2003
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