Call it safe, call it predictable, but don't dare call the Federal Family Education Loan Program (FFELP) ABS collateral type stodgy. While the student loan ABS sector pulled out all the stops for a year of issuance totaling $34 billion, the FFELP program gave the asset-backed commercial paper sector far and away the most notable deal in 2006 - that is, if the spectacle of ravenous investors beating down the issuer's door for the paper is any indication.

In late summer, Lincoln, Neb.-based Nelnet launched the Nelnet Student Asset Funding Extendable (SAFE) CP program, an ABCP conduit that would issue extendible notes (ENs) to fund FFELP loans. Everything played out in Nelnet's favor for a successful deal. Guaranteed by the U.S. Department of Education, the underlying asset class enjoyed very high credit ratings. In turn, this feature gave the program the highest marks from the credit rating agencies, too. The program needed no liquidity support or credit enhancement in the form of market value swaps from a swap counter party - simply unheard of for typical EN programs.

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