Offers to Purchase or Exchange Commenced in Respect of $6 Billion of Brazos-Serviced Auction Rate Securities

WACO, Texas--(BUSINESS WIRE)--

The Brazos Higher Education Service Corporation, Inc. (“Brazos”) announced today that Leon Higher Education Authority, Inc. (“Leon”), a Texas non-profit corporation for which Brazos acts as master servicer, is making offers to purchase or exchange in respect of approximately $6 billion aggregate principal amount of student loan-backed securities, almost all of which are auction rate securities (the “existing notes”). Brazos acts as master servicer for the companies that have issued the existing notes that are the subject of the offers: Brazos Higher Education Authority, Inc., Brazos Student Finance Corporation, Academic Finance Corporation, Trinity Higher Education Authority, Inc., Educational Funding Services, Inc., Federated Student Finance Corporation and EdInvest Company. The offers are being made with respect to existing notes issued under thirteen separate indentures, each of which is secured by a specified pool of student loans (the “underlying loan assets”).

The offers are being made pursuant to an Offer to Purchase or Exchange dated September 25, 2008. The specifics of each of the thirteen offers are set forth in a term sheet and each term sheet, together with the Offer to Purchase or Exchange, is referred to as a “Statement.” The offers are being made only through the Statements and this press release is not an offer.

Each offer is being made in respect of securities issued under one of the thirteen indentures referred to above and is subject to conditions specified in the relevant Statement, including a minimum tender condition for each offer that (1) at least 95% of the outstanding aggregate principal amount of the senior existing notes subject to that offer are validly tendered and (2) at least 99% of the outstanding aggregate principal amount of the subordinate existing notes subject to that offer are validly tendered. The offers will be pursued in groups such that the aggregate related underlying loan assets does not exceed approximately $2.0 billion, based on factors including the particular offers that meet the minimum tender condition described above.

In each offer, Leon is offering holders of any and all outstanding senior existing notes issued under a given indenture a cash price of $940 for eleven of the thirteen indentures and $930 and $920 for the other two indentures, for each $1,000 principal amount of their outstanding senior existing notes, plus accrued but unpaid interest (other than carry-over interest). Leon is also offering, in each offer, to exchange any and all outstanding subordinate existing notes for consideration consisting, for each $1,000 principal amount of outstanding subordinate existing notes, of $200 in cash, $200 principal amount of new subordinate lien securities that Leon will issue and $350 principal amount of new junior subordinate lien securities that Leon will issue, plus accrued but unpaid interest (other than carry-over interest).

In connection with settlement of any group of offers that Leon successfully completes, the underlying loan assets related to this group will be transferred to Leon in a single combined pool, and Leon will simultaneously (a) issue new senior term asset-backed securities to generate cash for the purpose of making the cash payments required under the offers and paying certain expenses of the existing note issuers and Leon and (b) issue the new subordinate lien and junior subordinate lien securities, which will be part of the consideration paid to holders of subordinate existing notes as referred to above. Expenses of the existing note issuers to be paid will include the cost of redeeming at par any existing notes that are not retired in the offers and any classes of securities issued under the same indenture that are not tendered for in the offers.

As part of the offers, Leon is seeking consents to proposed amendments to the indentures governing the existing notes in order to facilitate defeasance of those indentures and holders will be required to consent to proposed amendments to the related indentures in order to tender existing notes. The full offer consideration described above includes a $5 consent payment in each case, which will not be paid to any holders that tender after the applicable consent deadline. Holders may not tender their existing notes without delivering consents and may not deliver consents without also tendering their existing notes.

Immediately following the expiration date for the offers, holders whose senior existing notes have been accepted for purchase may, at their option, elect to apply a portion of the cash they are entitled to receive to purchase senior unsecured notes of a bank holding company that is not affiliated with Brazos or Leon so that they would receive those notes in lieu of a portion of the cash otherwise deliverable to them at settlement. Holders of senior existing notes that elect to exercise this option will receive cash consideration at settlement plus a principal amount of bank holding company notes that will be equal to the principal amount of the senior existing notes they have tendered (plus accrued interest other than carry-over interest). The bank holding company notes are being offered exclusively pursuant to a preliminary prospectus, which is attached to the Offer to Purchase or Exchange and may be obtained from the dealer manager for the offers. Leon, Brazos and the existing note issuers will not have any obligations under such bank holding company notes and they did not prepare, and are not responsible for, the preliminary prospectus relating to such notes attached to the Offer to Purchase or Exchange.

Each offer will expire at 8:00 a.m., Eastern Standard Time, on November 6, 2008, unless extended. Holders of existing notes who wish to receive the total consideration referred to above must validly tender and not validly withdraw their existing notes at or prior to 5:00 p.m., Eastern Standard Time, on October 17, 2008, unless extended.

Leon has retained Citigroup Global Markets Inc. to act as the dealer manager for the offers and solicitation agent for the consent solicitations. Citi can be contacted at (800) 558-3745 (toll-free) or (212) 723-6106 (collect).

Media and press inquiries can be directed to Danielle Romero-Apsilos at Citi at (212) 816-2264 (main) or (212) 816-6750 (alternate).

Further details about the terms and conditions of the offers are set forth in the Statements referred to above, and the offers are being made solely through the Statements. The Statements and other documents relating to the offers and consent solicitations are expected to be distributed to holders beginning today. Requests for documents may be directed to Global Bondholder Services Corporation, the information agent, which can be contacted at (212) 430-3774 (for banks and brokers only) or (866) 470-3800 (for all others toll-free). Documents will also be available shortly on its website:

http://www.gbsc-usa.com/Brazos/Offering_Documents.htm

This press release is for informational purposes only and is neither an offer to purchase or exchange nor a solicitation of an offer to sell the existing notes. The offer to buy the existing notes is only being made pursuant to the offer and consent solicitation documents, including the Offer to Purchase or Exchange that Leon is distributing to holders of the existing notes. The offers and consent solicitations are not being made to holders of existing notes in any jurisdiction in which the making or acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction. In any jurisdiction in which the securities laws or blue sky laws require the offers and consent solicitations to be made by a licensed broker or dealer, the offers and consent solicitations will be deemed to be made on behalf of Leon by the dealer manager or one or more registered brokers or dealers that are licensed under the laws of such jurisdiction.

About Brazos

Brazos serves as master servicer for a group of non-profit companies, which on a combined basis is the number four holder of student loans and the largest not for profit holder of FFELP loans in the country, and currently acts as master servicer in respect of over $15 billion of assets in all of the states. Brazos has agreements with twenty-nine guarantors and six subservicing companies.

Forward-Looking Statements

This press release contains statements of a forward-looking nature that represent Brazos’ and Leon’s management’s beliefs and assumptions concerning future events, including statements regarding the potential initiatives that this press release describes. Forward-looking statements involve risks, uncertainties and assumptions, including the risk that the offers described above will not be completed or will be completed on terms other than those described, and are based on information currently available to Brazos and Leon. Actual results may differ materially from those expressed in the forward-looking statements due to many factors, including, without limitation, the effect of market conditions and economic factors and changes in the value of assets underlying the existing notes. Brazos and Leon undertake no obligation to update any forward-looking statements to reflect events or circumstances that may arise after the date of this release.