Fitch Places 2 Student Loan ABS Classes from 2 KeyCorp Student Loan Trusts on Rating...

Fitch Places 2 Student Loan ABS Classes from 2 KeyCorp Student Loan Trusts on Rating Watch Negative

NEW YORK--(Business Wire)--
Fitch Ratings has placed the following two classes from two
KeyCorp Student Loan Trusts on Rating Watch Negative:

KeyCorp Student Loan Trust 1999-A

--Class B 'A'.

KeyCorp Student Loan Trust 1999-B

--Class B 'A+'.

Fitch's action follows Monday's bankruptcy filing by The Education
Resource Institute (TERI). The collateral supporting the KeyCorp
1999-A and 1999-B trusts consist of both federally guaranteed loans
originated under the Federal Family Education Loan Program (FFELP) and
private student loans, the majority of which is guaranteed against
default by TERI. As of February 29, 2008, the KeyCorp 1999-A portfolio
is comprised of 45.8% FFELP loans and 54.2% private loans guaranteed
against default primarily by TERI. As of January 31, 2008, KeyCorp
Student Loan Trust 1999-B is comprised of 32.76% FFELP loans, 43.1%
private loans guaranteed against default primarily by TERI, and 24.1%
nonguaranteed Key private student loans.

Fitch's concerns fall into two primary areas:

--Subordinate ratings where Fitch gave limited credit to TERI's
general reserves;

--Service levels related to collection and loss mitigation
functions, which if not maintained, could increase loss severity.

Classes rated at or below TERI's IFS rating at the time of the
transaction's close were afforded the benefit of TERI's general
reserves to pay for any defaults occurring on the portion of loans
financed in the trust that are guaranteed by TERI. As a result of
TERI's bankruptcy filing, Fitch is reviewing the KeyCorp 1999-A and
1999-B transactions to determine if, absent TERI's ability to pay
claims from its general reserves, current credit enhancement levels
are sufficient to maintain the current ratings on the class B notes.

With regards to service levels, Fitch is analyzing whether TERI's
bankruptcy filing will impact the quality of collection and loss
mitigation efforts for the collateral financed by the KeyCorp 1999-A
and 1999-B KeyCorp Student Loan Trusts. Currently, TERI manages
collections for defaulted collateral which is ultimately conducted by
third party service providers.

Fitch expects to complete its review of KeyCorp 1999-A and 1999-B
within 90 days. During this period, Fitch will continue to discuss the
full impact of TERI's bankruptcy filing with Key Education Resources,
and TERI.

KeyCorp Student Loan Trust Collateral and Servicing:

The KeyCorp 1999-A and 1999-B trusts consist of FFELP, third party
guaranteed private student loans and self-insured private student
loans. The private student loans are intended to assist individuals in
financing their undergraduate or graduate education beyond what the
FFELP affords. All of the private loans were originated under the
respective TERI or nonguaranteed Key private student loan program
underwriting guidelines.

The KeyCorp 1999-A trust student loans are serviced by the
Pennsylvania Higher Education Assistance Agency (PHEAA). The KeyCorp
1999-B trust student loans are serviced by PHEAA and Great Lakes
Educational Loan Services, Inc. (rated 'Proficient Plus' for FFELP and
'Proficient' for private loans by Fitch).

Fitch's rating definitions and the terms of use of such ratings
are available on the agency's public site, www.fitchratings.com.
Published ratings, criteria and methodologies are available from this
site, at all times. Fitch's code of conduct, confidentiality,
conflicts of interest, affiliate firewall, compliance and other
relevant policies and procedures are also available from the 'Code of
Conduct' section of this site.

Fitch Ratings, New York
Andrea Murad, +1-212-908-0896
Gary Santo, +1-212-908-9172
Media Relations:
Sandro Scenga +1-212-908-0278

Copyright Business Wire 2008