NextStudent Inc. to Explore Liquidity Options for Outstanding Auction Rate Notes
NextStudent Inc. announced today that it intends to explore alternatives for creating liquidity for the outstanding auction rate notes issued by NextStudent Master Trust I.
“We’ve signed a letter of engagement with a major financial institution,” said Jack Wallace, NextStudent Executive Vice President. “We haven’t initiated any transactions yet, but we’re committed to exploring all liquidity options for the Trust.”
These options include the possibility of repurchases in the open market or a tender offer for some or all of the Trust’s auction rate notes. If the Trust were to make any future repurchases or a tender offer, however, the purchase price would likely be at an amount less than par.
Caught in the blowback from the subprime mortgage implosion and the ongoing squeeze in the credit markets, the auction rate securities market has been in a severe and worsening liquidity crunch for most of the past year, with auctions failing for most auction rate securities, including student loan–backed auction rate notes. These market conditions have affected the liquidity of the auction rate notes of the Trust, as well as the auction rate securities of other student loan asset-backed issuers.
“We look forward to completing a transaction that could provide some liquidity to the NextStudent Trust,” said Wallace.
This announcement is not the commencement of any transaction. Any transaction would be accompanied by a future announcement, which would include additional information about the terms of the transaction and where to find further information.
NextStudent, www.nextstudent.com, Federal Lender Code 834051, is dedicated to helping students and their families find affordable ways to pay for student needs, for college, and for life after college. NextStudent offers one-on-one education finance counseling and a portfolio of highly competitive products and services, including a free online scholarship search engine, student health insurance, short-term health insurance, and information on parent and student loans, private student loans, and student loan consolidation programs.