Moody's Investors Service withdrew the 'Ca' issuer rating for The Education Resources Institute (TERI).
The rating agency has withdrawn this rating because the issuer has entered bankruptcy.
In mid-April, TERI filed for Chapter 11 bankruptcy after a downgrade from Moody's tripped a trigger on a loan contract that resulted in the company having to post cash to cover its student loan guarantees.
The initial downgrade, to 'B2' from 'Baa3', happened on March 26, after Moody's expressed concerns regarding TERI's asset quality, liquidity position and adequacy of capital reserves.
Making matters worse, TERI's subsequent Chapter 11 filing resulted in two downgrades. Moody's and Fitch Ratings, dropped TERI's rating down to 'Ca' and 'C', respectively.
TERI provides guarantees to private student loans and counts First Marblehead, a company that frequently securitizes private student loans, as one of its biggest clients.
First Marblehead's transactions, issued under the name National Collegiate Student Loan Trust, receive protection via a fully funded TERI pledge fund, which is available to be drawn upon as private student loans in the trust default, according to Barclays Capital analysts back in April.