Vermont Business Magazine Moody's Investors Service has upgraded the ratings of the Senior Series 2015A bonds of Vermont Student Assistance Corp, which VSAC says signals continued confidence in the performance of its Vermont Advantage loan program. VSAC said in a statement Friday that Advantage customers are successfully repaying their loans because of VSAC’s trusted customer service and affordable rates.
Scott Giles, VSAC president and CEO, said the Moody’s upgrade is significant because it indicates that VSAC continues to outperform the rating agency’s expectations.
“Education is clearly paying off for Vermonters,” Giles said. “VSAC works with students and families to help them make the right choices about which schools and programs will best fulfill their career needs as well as how to make smart financial decisions about the cost of their education.”
Vermonters understand that today’s careers require education and training after high school, Giles said. Beginning with Vermont’s 529 college savings plan, the Vermont Higher Education Investment Plan, VSAC builds a lasting relationship with families, which follows their children from middle school to career. “Because of this connection, VSAC sees some of the best portfolio performances in education financing.”
The full news release from Moody’s is below.
About VSAC – Changing Lives through Education and Training since 1965
Vermont Student Assistance Corporation is a public, nonprofit agency established by the Vermont Legislature in 1965 to help Vermonters achieve their education and training goals after high school. VSAC serves students and their families in grades 7-12, as well as adults returning to school, by providing education and career planning services, need-based grants, scholarships and education loans. VSAC has awarded more than $600 million in grants and scholarships for Vermont students, and also administers Vermont’s 529 college savings plan. Share your VSAC story by email to [email protected] or submit a video to YouTube. Find us at www.vsac.org or check in on Facebook and Twitter. #changing lives
Rating Action: Moody's upgrades Vermont Student Assistance Corporation
(2015 Indenture)
Global Credit Research - 10 May 2017
$20.7 million of asset-backed securities affected
New York, May 10, 2017 -- Moody's Investors Service, ("Moody's") has upgraded the ratings of the Senior
Series 2015A bonds of Vermont Student Assistance Corporation (2015 Indenture). The underlying collateral
consists of private student loans that are not guaranteed or reinsured under the Federal Family Education
Loan Program (FFELP) or any other federal student loan program.
The complete rating actions are as follow:
Issuer: Vermont Student Assistance Corporation (2015 Indenture)
$400,000 Senior Education Loan Revenue Bond Due 6/15/2018, Upgraded to Aaa; previously on Jul 17, 2015
Definitive Rating Assigned A3
$1,400,000 Senior Education Loan Revenue Bond Due 6/15/2019, Upgraded to Aaa; previously on Jul 17,
2015 Assigned A3
$2,200,000 Senior Education Loan Revenue Bond Due 6/15/2020, Upgraded to Aa3; previously on Jul 17,
2015 Assigned A3
$1,800,000 Senior Education Loan Revenue Bond Due 6/15/2021, Upgraded to Aa3; previously on Jul 17,
2015 Assigned A3
$1,300,000 Senior Education Loan Revenue Bond Due 6/15/2022, Upgraded to Aa3; previously on Jul 17,
2015 Assigned A3
$1,200,000 Senior Education Loan Revenue Bond Due 6/15/2023, Upgraded to Aa3; previously on Jul 17,
2015 Assigned A3
$1,600,000 Senior Education Loan Revenue Bond Due 6/15/2024, Upgraded to Aa3; previously on Jul 17,
2015 Assigned A3
$1,100,000 Senior Education Loan Revenue Bond Due 6/15/2025, Upgraded to Aa3; previously on Jul 17,
2015 Assigned A3
$2,700,000 Senior Education Loan Revenue Bond Due 6/15/2026, Upgraded to A1; previously on Jul 17, 2015
Assigned A3
$1,700,000 Senior Education Loan Revenue Bond Due 6/15/2027, Upgraded to A1; previously on Jul 17, 2015
Assigned A3
$1,500,000 Senior Education Loan Revenue Bond Due 6/15/2028, Upgraded to A1; previously on Jul 17, 2015
Assigned A3
$1,400,000 Senior Education Loan Revenue Bond Due 6/15/2029, Upgraded to A1; previously on Jul 17, 2015
Assigned A3
$2,900,000 Senior Education Loan Revenue Bond Due 6/15/2034, Upgraded to Aa3; previously on Jul 17,
2015 Assigned A3
RATINGS RATIONALE
Today's upgrades are a result of reduction in uncertainty related to prefunding period, recycling period and
collateral composition of the final loan pool as well as build up in the parity to 135.68% from 131.01% six
quarters ago. As the origination and recycling periods ended on June 15, 2016, there is no longer an
uncertainty surrounding the characteristics of the student loan pool, or the risk of negative carry due to nonorigination,
or delayed origination of loans. In assigning the original ratings, Moody's considered these risks by
evaluating more stressful loan characteristics and stressing the negative carry period in its analysis.
While all of the bonds are senior in the structure, the cash allocation to an individual bond depends on, among
other things, it's legal final maturity date, which may occur at a time during which the pool is experiencing
slower than expected amortization, due to lower than expected prepayment rates, or higher than expected
utilization of forbearance. Early pay bonds are less likely to be exposed to weakness in collateral performance
that may manifest later during the life of the transaction. On the other hand, bonds with a sufficiently long dated
legal final maturity may be able to withstand such stress and still pay off by maturity date. Moody's assessed
the risk of being paid off by legal final date by testing the effect of slower pool pay-down, while considering the
time tranching benefits provide by the structure.
PRINCIPAL METHODOLOGY
The principal methodology used in these ratings was "Moody's Approach to Rating U.S. Private Student Loan-
Backed Securities" published in January 2010. Please see the Rating Methodologies page on
www.moodys.com for a copy of this methodology.
On 22 March 2017, Moody's released a Request for Comment, in which it has requested market feedback on
potential revisions to its "Approach to Assessing Counterparty Risks in Structured Finance". If the revised
Methodology is implemented as proposed, the Credit Ratings on Vermont Student Assistance Corporation
(2015 Indenture) are not expected to be affected. Please refer to Moody's Request for Comment, titled "
Moody's Proposes Revisions to Its Approach to Assessing Counterparty Risks in Structured Finance," for
further details regarding the implications of the proposed Methodology revisions on certain Credit Ratings.
Factors that would lead to an upgrade or downgrade of the ratings:
Up
Among the factors that could drive the ratings up are a decrease in defaults rates, higher recoveries on
defaulted loans and/or lower net losses on the underlying assets than Moody's expects. Additionally, faster
than modeled pool pay-down may alleviate any risk of the bonds not paying-off by their legal final maturity
dates.
Down
Among the factors that could drive the ratings down are an increase in defaults rates, lower recoveries on
defaulted loans and/or higher net losses on the underlying assets than Moody's expects. Additionally, slower
than modeled pool pay-down may increase the risk of the bonds not paying-off by their legal final maturity
dates
REGULATORY DISCLOSURES
For further specification of Moody's key rating assumptions and sensitivity analysis, see the sections
Methodology Assumptions and Sensitivity to Assumptions of the disclosure form.
Moody's quantitative analysis entails an evaluation of scenarios that stress factors contributing to sensitivity of
ratings and take into account the likelihood of severe collateral losses or impaired cash flows. Moody's weights
the impact on the rated instruments based on its assumptions of the likelihood of the events in such scenarios
occurring.
For ratings issued on a program, series or category/class of debt, this announcement provides certain
regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or
category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing
ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this
announcement provides certain regulatory disclosures in relation to the credit rating action on the support
provider and in relation to each particular credit rating action for securities that derive their credit ratings from
the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory
disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be
assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms
have not changed prior to the assignment of the definitive rating in a manner that would have affected the
rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on
www.moodys.com.
For any affected securities or rated entities receiving direct credit support from the primary entity(ies) of this
credit rating action, and whose ratings may change as a result of this credit rating action, the associated
regulatory disclosures will be those of the guarantor entity. Exceptions to this approach exist for the following
disclosures, if applicable to jurisdiction: Ancillary Services, Disclosure to rated entity, Disclosure from rated
entity.
Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related
rating outlook or rating review.
Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal
entity that has issued the rating.
Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures
for each credit rating.
Vincent Raia
Associate Analyst
Structured Finance Group
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653
Caroline Pichon
Vice President - Senior Analyst
Structured Finance Group
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653
Releasing Office:
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653
© 2017 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and
affiliates (collectively, “MOODY’S”). All rights reserved.
CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. AND ITS RATINGS
AFFILIATES (“MIS”) ARE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT
RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND
MOODY’S PUBLICATIONS MAY INCLUDE MOODY’S CURRENT OPINIONS OF THE RELATIVE
FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE
SECURITIES. MOODY’S DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET
ITS CONTRACTUAL, FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED
FINANCIAL LOSS IN THE EVENT OF DEFAULT. CREDIT RATINGS DO NOT ADDRESS ANY
OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR
PRICE VOLATILITY. CREDIT RATINGS AND MOODY’S OPINIONS INCLUDED IN MOODY’S
PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. MOODY’S
PUBLICATIONS MAY ALSO INCLUDE QUANTITATIVE MODEL-BASED ESTIMATES OF CREDIT
RISK AND RELATED OPINIONS OR COMMENTARY PUBLISHED BY MOODY’S ANALYTICS, INC.
CREDIT RATINGS AND MOODY’S PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE
INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS AND MOODY’S PUBLICATIONS
ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD
PARTICULAR SECURITIES. NEITHER CREDIT RATINGS NOR MOODY’S PUBLICATIONS
COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR.
MOODY’S ISSUES ITS CREDIT RATINGS AND PUBLISHES MOODY’S PUBLICATIONS WITH THE
EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE, MAKE
ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR
PURCHASE, HOLDING, OR SALE.
MOODY’S CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL
INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE
MOODY’S CREDIT RATINGS OR MOODY’S PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION.
IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER.
ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO,
COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE
REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED,
REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN
WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON
WITHOUT MOODY’S PRIOR WRITTEN CONSENT.
All information contained herein is obtained by MOODY’S from sources believed by it to be accurate and
reliable. Because of the possibility of human or mechanical error as well as other factors, however, all
information contained herein is provided “AS IS” without warranty of any kind. MOODY'S adopts all necessary
measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources
MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However,
MOODY’S is not an auditor and cannot in every instance independently verify or validate information received
in the rating process or in preparing the Moody’s publications.
To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives,
licensors and suppliers disclaim liability to any person or entity for any indirect, special, consequential, or
incidental losses or damages whatsoever arising from or in connection with the information contained herein or
the use of or inability to use any such information, even if MOODY’S or any of its directors, officers, employees,
agents, representatives, licensors or suppliers is advised in advance of the possibility of such losses or
damages, including but not limited to: (a) any loss of present or prospective profits or (b) any loss or damage
arising where the relevant financial instrument is not the subject of a particular credit rating assigned by
MOODY’S.
To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives,
licensors and suppliers disclaim liability for any direct or compensatory losses or damages caused to any
person or entity, including but not limited to by any negligence (but excluding fraud, willful misconduct or any
other type of liability that, for the avoidance of doubt, by law cannot be excluded) on the part of, or any
contingency within or beyond the control of, MOODY’S or any of its directors, officers, employees, agents,
representatives, licensors or suppliers, arising from or in connection with the information contained herein or the
use of or inability to use any such information.
NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS,
MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY SUCH RATING OR OTHER
OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY’S IN ANY FORM OR MANNER
WHATSOEVER.
Moody’s Investors Service, Inc., a wholly-owned credit rating agency subsidiary of Moody’s Corporation
(“MCO”), hereby discloses that most issuers of debt securities (including corporate and municipal bonds,
debentures, notes and commercial paper) and preferred stock rated by Moody’s Investors Service, Inc. have,
prior to assignment of any rating, agreed to pay to Moody’s Investors Service, Inc. for appraisal and rating
services rendered by it fees ranging from $1,500 to approximately $2,500,000. MCO and MIS also maintain
policies and procedures to address the independence of MIS’s ratings and rating processes. Information
regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities
who hold ratings from MIS and have also publicly reported to the SEC an ownership interest in MCO of more
than 5%, is posted annually at www.moodys.com under the heading “Investor Relations — Corporate
Governance — Director and Shareholder Affiliation Policy.”
Additional terms for Australia only: Any publication into Australia of this document is pursuant to the Australian
Financial Services License of MOODY’S affiliate, Moody’s Investors Service Pty Limited ABN 61 003 399
657AFSL 336969 and/or Moody’s Analytics Australia Pty Ltd ABN 94 105 136 972 AFSL 383569 (as
applicable). This document is intended to be provided only to “wholesale clients” within the meaning of section
761G of the Corporations Act 2001. By continuing to access this document from within Australia, you represent
to MOODY’S that you are, or are accessing the document as a representative of, a “wholesale client” and that
neither you nor the entity you represent will directly or indirectly disseminate this document or its contents to
“retail clients” within the meaning of section 761G of the Corporations Act 2001. MOODY’S credit rating is an
opinion as to the creditworthiness of a debt obligation of the issuer, not on the equity securities of the issuer or
any form of security that is available to retail investors. It would be reckless and inappropriate for retail investors
to use MOODY’S credit ratings or publications when making an investment decision. If in doubt you should
contact your financial or other professional adviser.
Additional terms for Japan only: Moody's Japan K.K. (“MJKK”) is a wholly-owned credit rating agency subsidiary
of Moody's Group Japan G.K., which is wholly-owned by Moody’s Overseas Holdings Inc., a wholly-owned
subsidiary of MCO. Moody’s SF Japan K.K. (“MSFJ”) is a wholly-owned credit rating agency subsidiary of
MJKK. MSFJ is not a Nationally Recognized Statistical Rating Organization (“NRSRO”). Therefore, credit
ratings assigned by MSFJ are Non-NRSRO Credit Ratings. Non-NRSRO Credit Ratings are assigned by an
entity that is not a NRSRO and, consequently, the rated obligation will not qualify for certain types of treatment
under U.S. laws. MJKK and MSFJ are credit rating agencies registered with the Japan Financial Services
Agency and their registration numbers are FSA Commissioner (Ratings) No. 2 and 3 respectively.
MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and
municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MJKK or MSFJ (as
applicable) have, prior to assignment of any rating, agreed to pay to MJKK or MSFJ (as applicable) for
appraisal and rating services rendered by it fees ranging from JPY200,000 to approximately JPY350,000,000.
MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.
Source: WINOOSKI (May 12, 2017) – VSAC. Moody's