Moody's Investors Service has placed under review for possible downgrade the ratings of 93 notes in 12 National Collegiate Student Loan Trust transactions. The actions follow Monday's bankruptcy filing of The Education Resources Institute (TERI). Moody's downgraded TERI's rating on Tuesday to 'Ca' from 'B2.'
The primary servicer of the deals is Pennsylvania Higher Education Assistance Agency (PHEAA), the rating agency noted. First Marblehead Education Resources, a subsidiary of First Marblehead Corp., assigns servicing responsibilities for loans delinquent more than sixty days to collection agencies. The rating agency noted that TERI's bankruptcy could affect First Marblehead's ability to efficiently service the securitized loans. This might, in turn, negatively affect the default and recovery rates on these loans.