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Fitch removes negative watch from bonds

JACKSON — Fitch Ratings has affirmed 20 classes of senior bonds, removed the rating watch of “negative” and affirmed seven classes of subordinate bonds issued by Mississippi Higher Education Assistance Corporation (MHEAC) 1999 Trust. The rating outlook remains “stable” for the senior bonds.

The actions are based on the improving credit profile of the trust as reflected by the parity increase.

Fitch wrote: “The subordinated bonds were put on Rating Watch Negative on Jan. 30, 2009, because of decreasing parity due to auction rate failures and negative carry from significant amounts of cash in the redemption account. However, as of June 23, 2009, MHEAC has redeemed $164.4 million of bonds using the funds in the redemption account, including any unused recycling proceeds.

“The bonds were redeemed at a discount. As a result the total and senior parity has increased to 103.32 percent and 115.47 percent, respectively, for the distribution period ending Jun. 30, 2009, compared with 99.83 percent total parity and 109.49 percent senior parity when the subordinate bonds were place on Rating Watch Negative.”


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