The Mississippi Higher Education Assistance Corp. (MHEAC) has priced its $397 million student loan securitization, offering two classes of Series 2014 notes, according to an offering document.

The $387 million of Class A notes, rated ‘AAA/AA+’ by Fitch Ratings and Standard & Poor’s respectively, and maturing in October 2035 priced at a spread of 68 basis points over one-month Libor.  The $10 million of unrated Class B-1 notes maturing in May 2044 priced at 100 basis points over one-month Libor.

The MHEAC Series 2014-1 transaction is backed by student loans that are at least 97% insured by the U.S. federal government.  Most of the note proceeds will be used to refund the outstanding auction-rate securities issued under the corporation’s 1999 and 2004 indentures.  

The loan pool consists of approximately 76% consolidation loans, 24% Stafford loans, and 1% Parent Loans for Undergraduate Students (PLUS) loans and Graduate PLUS loans.  The series 2014-1 notes will receive payments primarily from collections on a pool of FELLP loans.

The pool of loans is well seasoned, with 78% of the loans in active repayment status, with 67% in repayment for more than three years.

Bank of America Merrill Lynch will underwrite the deal.

Founded in 1980, Mississippi Higher Education Assistance Corporation is a nonprofit corporation organized to acquire student loans incurred under the Higher Education Act.

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