Fitch Revises CollegeInvest March 1, 1999 Amended & Restated Indenture of Trust to 'AAA'.
Initially, the trust was rated 'AAA' based solely on the financial guaranty provided by Ambac. As a result, upon Fitch's downgrade of Ambac to 'AA'/Rating Watch Negative the Trust was downgraded accordingly. Based upon its review of the transaction performance and credit enhancement absent the Ambac policy, Fitch has determined that a revised rating of 'AAA' is appropriate. Even though this revised rating does not rely on the Ambac guaranty, under the Municipal Bond Insurance Policy, Ambac still remains obligated to insure timely interest and ultimate principal payments to the bondholders.
Consistent with Fitch's policy in other structured finance sectors, in the event that a trust's underlying rating is higher than the insurer's current Insurer Financial Strength (IFS) rating, the Fitch rating will be based on the underlying rating rather than the insurer's IFS rating. For more information please refer to 'Fitch Downgrades Ambac; Ratings Remain on Watch Negative', dated Jan. 18, 2008, available on the Fitch Ratings web site at www.fitchratings.com.
As a result of the review, Fitch has revised the ratings of the following five classes and removed them from 'Rating Watch Negative':
--CollegeInvest 1989A revised to 'AAA/F1+' from 'AA/F1+' Rating Watch Negative;
--CollegeInvest 1990A revised to 'AAA/F1+' from 'AA/F1+' Rating Watch Negative;
--CollegeInvest 1999A-2 revised to 'AAA/F1+' from 'AA/F1+" Rating Watch Negative;
--CollegeInvest 1999A-3 revised to 'AAA/F1+' from 'AA/F1+' Rating Watch Negative;
--CollegeInvest 1999A-4 revised to 'AAA' from 'AA' Rating Watch Negative.
Credit enhancement consists of excess spread, over-collateralization, and a reserve account. The trust also benefits from financial guarantee provided by Ambac whose Fitch rating 'AA'/Rating Watch Negative still denotes a very strong capacity to meet policyholder and contract obligations on a timely basis. In addition, the reserve account has a minimum balance requirement of 2.0% of the outstanding bond balance which is covered by a surety bond also provided by Ambac.
Overall, collateral performance for the trust has been consistent with or better than expectations from a net default and delinquency perspective. Deferment levels have been in-line with the Fitch's Deferment Index. Forbearance levels were initially higher than Fitch's Forbearance Index, but have fallen below the index within the past year. As a result, trust total asset to liability or parity ratio has increased to approximately 120.0% due to positive levels of excess spread generated.
The trust finances 99.67% FFELP (Federal Family Education Loan Program) and 0.33% private student loans originated under CollegeInvest's Private Education Loan Program. FFELP loans are guaranteed by an eligible guarantor to at least 97% of principal and accrued interest, depending on the loan's origination date. The FFELP loans are also reinsured by the U.S. Department of Education up to the same amounts. The private education loan program consists of loans originated by CollegeInvest to qualified graduate and undergraduate students. The private education loan program is offered to creditworthy U.S. citizens or permanent residents who are students enrolled at least half-time. A student borrower must meet established FICO credit score requirements in order to secure a loan without a cosigner. The loans are risk based priced with interest rates determined by the FICO score of the borrower or cosigner. Nelnet and Iowa Student Loan (ISL) service 72.7% and 27.3% of the student loans in the trust, respectively, with Nelnet servicing all the private student loans. CollegeInvest, formerly Colorado Student Obligation Bond Authority (CSOBA), was established in 1979 as a political subdivision of the state of Colorado for the purpose of assisting state residents in financing their secondary education. On May 26, 2000, CSOBA became a division of the Colorado Department of Higher Education. As a state agency, CSOBA qualifies as an eligible lender and also enables CSOBA to issue tax-exempt debt.
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|Date:||Mar 10, 2008|
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