Fitch Affirms and Revises the Outlook on Vermont Student Assistance Corp Ed Loan VRD Revs

NEW YORK--(BUSINESS WIRE)--Fitch Ratings affirms at 'A+sf/F1+sf' the long- and short-term ratings assigned to the $200,000,000 ($145,200,000 currently outstanding) Vermont Student Assistance Corporation Education Loan Tax-Exempt Variable Rate Demand Revenue Bonds Senior Series 2008C-1 and 2008C-2. The Rating Outlook has been revised to Positive from Stable.

KEY RATING DRIVERS

The rating of the bonds are based on the support provided by a distinct direct-pay letter of credit (LOC) issued by State Street Bank and Trust Company (State Street's long-term Issuer Default Rating [IDR] is currently rated 'A+,' and its short-term IDR is 'F1+' with a Positive Outlook by Fitch). State Street is obligated to make payments of interest and principal on the bonds upon maturity, acceleration, and redemption, as well as the purchase price for tendered bonds. The rating will expire upon the earliest of: (a) March 15, 2014, the stated expiration date of the State Street LOC; (b) conversion to any interest rates other than a covered rate; (c) any prior termination of the State Street LOC; and (d) defeasance of the bonds. The State Street LOC provides full and sufficient coverage of principal plus an amount equal to 202 days of interest at a maximum rate of 12 % based on a year of 365 days and purchase price for tendered bonds, while in the weekly rate mode.

RATING SENSITIVITIES

The rating of the bonds is exclusively tied to the long- and short-term ratings that Fitch maintains on the bank providing the LOC and will reflect all changes to the bank's ratings.

Fitch Affirms the ratings and revises the Outlook to Positive from Stable for the following:

--Class C-1 at 'A+sf/F1+sf';
--Class C-2 at 'A+sf/F1+sf'.

Additional information is available at www.fitchratings.com. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.

Applicable Criteria and Related Research:
--'Global Structured Finance Rating Criteria' (June 6, 2012);
--'Rating U.S. Federal Family Education Loan Program Student Loan ABS' (April 3, 2012).

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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