The third-ever student loan securitization containing 90-day commercial paper-linked paper saw strong demand last week, signaling that the sector has found a new benchmark; but some in the market think it is too soon to say whether CP can replace three-month T-bills as the sector's secondary index, along with three-month Libor.

Last Wednesday's pricing of $400 million of student loan-backed notes from South Carolina Student Loan Corp. consisted of two equal classes, one indexed to three-month Libor and one indexed to the Federal Reserve's 90-day commercial paper rate. The $200 million piece represents the largest amount of CP-indexed paper sold to date, according to a source at lead manager William R. Hough & Co.

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