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.