Fitch Ratings currently maintains 'AAAsf' ratings on senior student loan bonds issued by the Montana Higher Education Student Assistance Corporation (MHESAC) under the Indenture of Trust, dated Aug. 1, 1993 as amended by the Twenty-First Supplemental Indenture, dated May 1, 2012, and further amended and supplemented by the Twenty-Second Supplemental Indenture dated Sept. 1, 2012 between MHESAC and Wells Fargo Bank N.A. as Trustee. The Rating Outlook is Negative. The Negative Outlook on the senior notes is tied to the Outlook on the U.S. sovereign rating. A full list of the ratings follows at the end of this release.
MHESAC informed Fitch of the Twenty-Second Supplemental Indenture. Fitch is treating this as a notification. Fitch has reviewed the transaction and determined the change will not have an effect on the outstanding ratings.
The trust may transfer funds from the revenue account to the acquisition account in order to purchase eligible rehabilitation loans from a guaranty agency. The terms of the Twenty-First Supplemental Indenture limits the amount of such repurchased eligible rehabilitation loans, which are to be purchased in specified increments over the life of the transaction. Pursuant to the Twenty-Second Supplemental Indenture, purchases of eligible rehabilitation loans will be permitted up to and including June 30, 2027.
The trust will allocate funds to the acquisition fund to purchase eligible rehabilitation loans after allocating funds to pay principal to the senior series 2005B and senior series 2006A bonds but prior to allocating funds to pay principal to the senior series 2012A bonds. Fitch does not consider the purchase amount of rehabilitation loans, which could comprise approximately 2.7% of the loan portfolio, to be material. Under Fitch's stress scenarios, such purchase of rehabilitation loans did not materially impact the timing of the payment of the senior series 2012A bonds, as each class of senior series 2012A bonds continued to pay off before their legal final maturities.
Based on the information provided, Fitch has determined that the execution and delivery of the Twenty-Second Supplemental Indenture and the amendments to the 1993 Indenture will not have an impact on the existing ratings of the outstanding bonds. This determination only addresses the effect of the Supplemental Resolution and the amendments to the 1993 Indenture on the current ratings assigned by Fitch to the bonds. It does not address whether the Supplemental Resolution or the amendments to the 1993 Indenture is permitted by the terms of the transaction documents, nor does it address whether it is in the best interests of, or prejudicial to, some or all of the holders of the bonds listed below.
The review performed by Fitch is based on the documents and information provided to Fitch by the issuer and other parties and is subject to receipt of final closing documents. Fitch relies on all of these parties for the accuracy of such information and documents. Fitch did not audit or verify the trust or accuracy of such information.
The following ratings and Outlooks on the Montana Higher Education Student Assistance Corporation's outstanding senior student loan revenue bonds remain unchanged:
Senior Series 2005B 'AAAsf,' Outlook Negative;
Senior Series 2006A 'AAAsf,' Outlook Negative;
Senior Series 2012-A1 'AAAsf,' Outlook Negative;
Senior Series 2012-A2 'AAAsf,' Outlook Negative;
Senior Series 2012-A3 'AAAsf,' Outlook Negative.
Applicable Criteria and Related Research:
--'Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria' (April 3, 2012);
--'Global Structured Finance Rating Criteria' (June 6, 2012);
--'Fitch Clarifies Policy for Structured Finance Rating Confirmations' (Jan. 13, 2009);
--'Fitch Clarifies Policy on Student Loan ABS Confirmation Requests' (May 8, 2009).
Applicable Criteria and Related Research:
Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=675202
Global Structured Finance Rating Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=679923
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Contacts:
Fitch Ratings
Primary Analyst:
Jeffrey Prackup, +1-212-908-0839
Director
Fitch,
Inc.
One State Street Plaza, New York, NY 10004
or
Committee
Chairperson:
Cynthia Ullrich, +1-212-908-0609
Senior Director
or
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Sandro Scenga, New York, +1 212-908-0278
sandro.scenga@fitchratings.com
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