Fitch Ratings ‘negative’ about senior student loan notes
by MBJ Staff
Published: August 17,2012
JACKSON — Fitch Ratings has affirmed the senior student loan notes issued by Mississippi Higher Education Assistance Corp. (MHEAC), 1993 Trust Indenture. The Rating Outlook is “negative.”
Fitch wrote: “The collateral supporting the notes comprises 95 percent cash and 5 percent student loans originated under the Federal Family Education Loan Program (FFELP). The Negative Outlook on the senior notes is tied to the outlook on the U.S. sovereign rating and potential negative carry associated with cash-backed collateral upon expiration of guaranteed investment contracts. “
Fitch reports it used its Global Structured Finance Rating Criteria and U.S. FFELP Student Loan ABS Rating Criteria to review the ratings.
Fitch said: “The ratings on the senior notes are affirmed based on a sufficient level of credit enhancement from a combination of overcollateralization and projected minimum excess spread.
“After reviewing the trust’s performance, it was determined that the trust possessed sufficient cash, cash reserves and principal receivables that would ensure that the outstanding bonds could be paid in full in the near term. Although maximum bond interest rates held for a sustainable period of time would typically have a detrimental effect on the ability of the trust to pay down the bonds before their legal final maturities, the trust has entered into guaranteed investment contracts on the funds held in the surplus account and the reserve fund that earn interest at the bond rate plus a spread. If interest rates increase, the funds in those accounts receive an interest rate that prevents negative spread.”
Fitch has taken the following rating actions:
MHEAC 1993 Trust Indenture
• Class 1996 A affirmed at “AAAsf;” outlook, negative
• Class 1998 B affirmed at “AAAsf;” outlook, negative
To sign up for Mississippi Business Daily Updates, click here.
Mississippi Economic Council
Mississippi Chambers of Commerce
Mississippi State Legislature
Mississippi Development Authority
Mississippi Economic Development Council
North Mississippi News
Social Security Disability Lawyer
Auto Accidents Lawyer
Top Posts & Pages
- Ford F-150s roll into Mississippi, ahead of the pickup pack
- Nissan supplier efforts key to more Miss. output
- Irby commits suicide after wife's prison release
- Nehi Bottling Company has been a Cleveland fixture for 85 years
- UNFOLDING OF A RESCUE — How Sanderson Farms saved Mississippi's PGA tour event
- Two new casinos like the odds on Mississippi Gulf Coast
- Entergy plans three solar-power pilot projects
- MBJ Business Person of the Year: Joe Sanderson Jr.
- Birdwatching generates big bucks for coastal economy with room to grow