Fitch: Straight-A Funding Holdings in Rated Money Market Funds

NEW YORK--(Business Wire)--
Rated money market funds investing in student loan short-term (SLST) notes
issued by Straight-A Funding, LLC (rated 'F1+' by Fitch) have sought feedback on
how such ABCP holdings are viewed in terms of Fitch ratings criteria,
particularly with respect to concentration limits. Fitch's rating criteria for
'AAA/V1+' money market funds outlines minimum asset credit quality guidelines of
'A/F1', with 5% per issuer limit applicable to all issuers with the exception of
U.S. Treasury and government agency securities.

Straight-A Funding is, however, in Fitch's view a unique instance of a
government supported asset-backed commercial paper (ABCP) vehicle. The notes
benefit from a fully-supported liquidity facility provided by the Federal
Financing Bank (FFB), the credit risk of which is considered by Fitch to be
commensurate with that of the U.S. government. As a result, a higher
concentration than 5% would be appropriate in Fitch's view, reflecting low
credit risk and high quality liquidity support.

That said, some overall limit on a fund's exposure to Straight-A Funding at this
juncture also seems appropriate. Fitch notes that FFB is an unrated
government-owned corporation which differs from traditional government sponsored
enterprises. Further, there is limited trading history for the SLST notes and
uncertainty with respect to spread volatility relative to other securities
issued or guaranteed by the U.S. government.

For funds investing in Straight-A Funding above a 5% concentration, Fitch would
expect to have a dialogue with the investment advisors to understand their plans
in the context of their overall portfolio holdings and investment objectives.
Moreover, in terms of calculating liquidity and weighted average maturity, funds
should look to the legal final maturities of SLST notes.

Straight-A Funding is a fully-supported ABCP program managed by BMO Capital
Markets Corp., a wholly-owned subsidiary of the Bank of Montreal (rated
'AA-/F1+' by Fitch). The program was created pursuant to the Ensuring Continued
Access to Student Loans Act. Straight-A Funding may issue two series of SLST
notes (series-1 and series-2). Series-1 SLST notes may be issued with expected
maturities of up to 90 days and legal final maturities on the third business day
following the expected maturity. Series-2 SLST notes may be issued with expected
maturities of up to 90 days and legal final maturities on the seventh business
day following the expected maturity. The proceeds of the issuance of SLST notes
are used to fund the purchase of 'AAA' rated funding notes backed by Federal
Family Education Loan Program (FFELP) student loans.

SLST noteholders benefit from full credit and liquidity support provided by the
FFB. The FFB is a U.S. government corporation. The support mechanisms are sized
to cover the face amount of SLST notes being funded by the borrowing plus any
interest accrued and to accrue to the legal final maturity of the notes.
Further, Straight-A Funding has entered into a put agreement with the Department
of Education, whereby, following the occurrence of certain events, among them
being a failure by the liquidity provider to make a liquidity funding,
Straight-A Funding will have the right to put student loans to the Department of
Education and the Department of Education is obligated to purchase such loans no
later than 45 days after receipt of notice of the put.

Fitch maintains an 'F1+' rating on the SLST notes issued by Straight-A Funding.
The rating is based on the application of Fitch's ABCP criteria, the full credit
and liquidity support mechanism provided by the FFB, the quality of assets being
purchased, the legal structure, and the program's administrative support. For
more information about the SLST notes refer to the report titled 'Straight-A
Funding, LLC' available on Fitch's web site at 'www.fitchratings.com'.

On Jan. 26, 2009, Fitch issued an exposure draft outlining proposed criteria
changes for rating global money market funds. The final version of the criteria
report is forthcoming. The report, titled 'Exposure Draft: Global Money Market
Fund Rating Criteria', is also available at 'www.fitchratings.com'.

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
Viktoria Baklanova, CFA, +1-212-908-9162
(New York)
Nathan Flanders, +1-212-908-0827
(New York)
Aymeric Poizot, CFA, +33-1-44-29-92-76
(Paris)
Brian Bertsch, +1-212-908-0549
(Media Relations, New York)
brian.bertsch@fitchratings.com

Copyright Business Wire 2009