November 14, 2012 / 4:48 PM / in 5 years

TEXT-S&P rates Vt. Student Assistance 2012-1 notes

OVERVIEW
     -- Vermont Student Assistance Corp.'s issuance is an ABS securitization 
backed by student loans that are at least 97% reinsured by the U.S. federal 
government.
     -- We assigned our preliminary rating to the class A notes.
     -- The preliminary rating reflects our view of the transaction's senior 
parity, U.S. federal government's reinsurance, scenario analysis, and the 
transaction's payment and legal structures, among other factors.
 
NEW YORK (Standard & Poor's) Nov. 14, 2012--Standard & Poor's Ratings Services 
today assigned its preliminary rating to Vermont Student Assistance Corp.'s 
$755.0 million student loan asset-backed notes series 2012-1 class A notes 
(see list).

The note issuance is an asset-backed securitization backed by student loans 
that are at least 97% reinsured by the U.S. federal government.

The preliminary rating is based on information as of Nov. 14, 2012. Subsequent 
information may result in the assignment of final ratings that differ from the 
preliminary ratings.

The preliminary rating reflects our view of: 
     -- The transaction's initial senior parity of approximately 104.17%, 
which is defined as the percentage of the trust assets (the pool balance and 
the initial reserve fund) divided by the senior note principal amount;
     -- The U.S. federal government's reinsurance of at least 97% of the 
loans' principal and interest; 
     -- The timely interest and principal payments made under stressed cash 
flow modeling scenarios that we believe are consistent with the assigned 
preliminary 'AA+ (sf)' rating;
     -- A scenario analysis indicating that under moderately stressful 
economic conditions (defined as 2.25x expected defaults) the rating would not 
decline more than one rating category in the first year, which is consistent 
with our credit stability criteria; and
     -- The transaction's payment and legal structures.
 
STANDARD & POOR'S 17G-7 DISCLOSURE REPORT
 
SEC Rule 17g-7 requires an NRSRO, for any report accompanying a credit rating 
relating to an asset-backed security as defined in the Rule, to include a 
description of the representations, warranties and enforcement mechanisms 
available to investors and a description of how they differ from the 
representations, warranties and enforcement mechanisms in issuances of similar 
securities.

The Standard & Poor's 17g-7 Disclosure Report included in this credit rating 
report is available at "RELATED CRITERIA AND RESEARCH
Related criteria
     -- Counterparty Risk Framework Methodology And Assumptions, May 31, 2012
     -- Global Investment Criteria For Temporary Investments In Transaction 
Accounts, May 31, 2012
     -- U.S. Interest Rate Assumptions Revised For May 2012 And Thereafter, 
April 30, 2012
     -- U.S. Government Support In Structured Finance And Public Finance 
Ratings, Sept. 19, 2011
     -- General Criteria: Principles Of Credit Ratings, Feb. 16, 2011
     -- Methodology: Credit Stability Criteria, May 3, 2010
     -- Methodology: Criteria for Global Structured Finance Transactions 
Subject to a Change in Payment Priorities upon a Nonmonetary EOD, March 16, 
2010
     -- Legal Criteria For U.S. Structured Finance Transactions: Overview Of 
Legal Criteria For U.S. Structured Finance Transactions, Oct. 1, 2006
     -- Student Loan Criteria: Student Loan Programs, Oct. 1, 2004
     -- Student Loan Criteria: The Rating Process For Student Loan 
Transactions, Oct. 1, 2004
     -- Student Loan Criteria: Evaluating Risk In Student Loan Transactions, 
Oct. 1, 2004
     -- Student Loan Criteria: Structural Elements In Student Loan 
Transactions, Oct. 1, 2004
     -- Student Loan Criteria: Rating Methodology For Student Loan 
Transactions, Oct. 1, 2004
Related research
     -- Presale: Vermont Student Assistance Corp. - Series 2012-1, Nov. 14, 
2012
     -- Global Structured Finance Scenario And Sensitivity Analysis: The 
Effects Of The Top Five Macroeconomic Factors, Nov. 4, 2011
     -- United States Of America Long-Term Rating Lowered To 'AA+' On 
Political Risks And Rising Debt Burden; Outlook Negative, Aug. 5, 2011

 
PRELIMINARY RATING ASSIGNED
Vermont Student Assistance Corp. - Series 2012-1  

Class    Rating    Type        Interest           Amount
                               rate             (mil. $)
A        AA+ (sf)  Senior      One-month LIBOR     755.0
B        NR        Subordinate One-month LIBOR      15.5


NR-Not rated.

Our Standards:The Thomson Reuters Trust Principles.
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