Fitch Affs 17 Classes From the Arkansas Student Loan Auth Amended & Restated 2000 Indenture of Trust

NEW YORK--(BUSINESS WIRE)--Fitch Ratings has affirmed 17 classes from the Federal Family Education Loan Program (FFELP) student loan revenue bonds issued by the Arkansas Student Loan Authority's Amended and Restated 2000 Indenture of Trust. A complete list of ratings is at the end of this release.

The collateral supporting the bonds consists of federally guaranteed loans originated under the FFELP. FFELP loans are guaranteed by an eligible guarantor to at least 97% of principal and accrued interest, depending on loan origination date. The FFELP loans are also reinsured by the U.S. Department of Education up to the same amounts.

Overall, collateral performance for the trust has been consistent with expectations from a net default and delinquency perspective. The maximum auction rate definitions for the different series are determined by either the T-Bill, SIFMA, commercial paper (CP), or LIBOR indices, depending on when the bonds are issued and their tax status. Additionally, the taxable auction rate also benefits from a net loan rate cap that is based on 90 day CP.

Although the indenture continues to experience failed auctions causing the bonds to pay interest at the maximum rate, the total parity ratio or the ratio of assets to liabilities remains healthy, and was 104.07% as of Sept. 30, 2008.

Credit enhancement consists of excess spread, and a debt service reserve account. Additionally, the class A notes benefit from subordination provided by the lower priority notes. The excess spread generated by the trusts has been sufficient to cover any losses and pay note principal to build credit enhancement.

The student loan portfolio is serviced by Educational Services of America, Inc. ('EdFinancial Services') and Nelnet, both of which are not rated by Fitch.

The ratings affirmed are as follows:

Arkansas Student Loan Authority Amended and Restated 2000 Indenture of Trust:

-- Senior Series 1994A 'AAA';

-- Subordinate Series 1994B 'A';

-- Senior Series 1996A 'AAA';

-- Senior Series 1997A 'AAA';

-- Senior Series 2000 A-1 'AAA';

-- Senior Series 2000 A-2 'AAA';

-- Senior Series 2004 A-1 'AAA';

-- Senior Series 2004 A-2 'AAA'

-- Senior Series 2004 A-3 'AAA';

-- Senior Series 2005 A-1 'AAA';

-- Senior Series 2005 A-2 'AAA';

-- Senior Series 2005 A-3 'AAA';

-- Senior Series 2006 A-1 'AAA';

-- Senior Series 2006 A-2 'AAA';

-- Senior Series 2006 A-3 'AAA';

-- Senior Series 2006 A-4 'AAA';

-- Senior Series 2006 B-1 'A'.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.