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COLORADO STUDENT OBLIGATION BOND AUTHORITY 1993 I-A/I-B 'AAA'/'A' BY FITCH -- FITCH FINANCIAL WIRE --

 NEW YORK, Dec. 1 /PRNewswire/ -- Colorado Student Obligation Bond Authority's (CSOBA) $60 million taxable student loan asset-backed notes, senior 1993 series I-A1 and I-A2 are rated `AAA.' CSOBA's $6 million 5.7% student loan asset-backed notes, senior subordinate 1993 series I-B are rated `A.' The ratings of the notes are based on the quality of the student loan portfolios and the 3% reserve fund. In addition, the series I-A notes benefit from the first loss position of the $6 million of senior subordinate notes. The ratings reflect the ability of the trust estate to redeem notes at maturity and pay accrued interest. The ratings do not address the liquidity for the notes, nor do they address the ability of series I-A noteholders to redeem notes on an auction date now or in the future.
 Proceeds will be used to acquire new loans, establish a debt service reserve fund and a capitalized interest fund equal to 3% and 1%, respectively, and pay issuance costs. Prior to Dec. 1, 1996 all amounts in the reserve fund in excess of the lesser of 3% of outstanding series I notes or $500,000 can be used to purchase new loans. Cash cannot be released from the trust unless the market value of the trust's assets to series I-A/B notes and to series I-A notes would be 103% and 112%, respectively. Subordinate notes cannot be redeemed unless the market value of the trust's assets to series I-A notes would be 109%.
 The portfolio will consist of Stafford, SLS, and Consolidated loans. The reserve fund has been sized to cover defaulted loans and the potential interest rate mismatch between the variable rate SLS loans and that of the auction rate notes.
 Cash flow from the loans proved strong under two `AAA' and two `A' scenarios. The `AAA' scenarios assumed a 40% cumulative default rate, 30% in the first year, 5% in the following two years. The `A' scenarios assumed a 25% cumulative default rate, 19% in the first year, 3% in the following two years. One `AAA' and one `A' scenario incorporated recycling of assets until Dec. 1, 1996, the other did not. Each scenario was tested to confirm timely repayment of principal.
 The Student Loan Division of the Colorado Department of Higher Education will serve as guarantor and partial servicer. UNIPAC will service the remainder of the portfolio.
 -0- 12/1/93
 /CONTACT: Kimberly O. Rhodes, 212-908-0529, or Steven B. Schoen, 212-908-0615, both of Fitch/


CO: Colorado Student Obligation Bond Authority ST: Colorado IN: SU: RTG

CK -- NY083 -- 9323 12/01/93 13:13 EST
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Publication:PR Newswire
Date:Dec 1, 1993
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