TEXT-S&P rates NorthStar Student Loan Trust bonds

Wed Oct 24, 2012 12:33pm EDT

Oct 24 - (Editor's note: This press release, originally published Oct. 15,
2012, is
being republished to reflect changes in the transaction's call provisions
within the presale report. A revised version follows.)
 
NEW YORK (Standard & Poor's) Oct. 15, 2012--Standard & Poor's Ratings Services 
assigned its preliminary 'AA-/A-1+' rating to NorthStar Student Loan Trust 
II's (the issuer's) adjustable-rate student loan revenue bonds series 2012A.

The assigned preliminary rating reflects our opinion of the credit and 
liquidity support that Royal Bank of Canada ('AA-/A-1+') provides in the form 
of an irrevocable direct-pay letter of credit (LOC). Under the LOC, Royal Bank 
of Canada fully supports all bond payment obligations when the bonds are in 
the weekly interest rate reset mode. Therefore, our preliminary rating applies 
only during this rate mode. If the bonds are converted to another rate mode, 
we will likely withdraw our rating.
 
The 'AA-' long-term component of our preliminary rating is based on our 
long-term issuer credit rating on Royal Bank of Canada ('AA-') and addresses 
full and timely payments of interest and principal when the bondholders have 
not exercised the put option. The 'A-1+' short-term component of our 
preliminary rating is based on our short-term issuer credit rating on Royal 
Bank of Canada ('A-1+') and addresses full and timely payments of interest and 
principal when the bondholders have exercised the put option.

In view of the series 2012A bond structure, changes to our rating on the 
weekly rate bonds can result from, among other things, changes to our rating 
on the LOC provider or amendments to the transaction's terms. We will maintain 
a rating on the bonds as long as they are in the weekly rate mode and the LOC 
has not expired or otherwise terminated. If either of these conditions 
changes, we will likely withdraw our rating on the bonds.

RELATED CRITERIA AND RESEARCH
 
Related Criteria
     -- Counterparty Risk Framework Methodology and Assumptions, May 31, 2012 
     -- Methodology And Assumptions: Approach To Evaluating Letter Of 
Credit-Supported Debt, July 6, 2009
 
Related Research
     -- Presale: Northstar Student Loan Trust II -  Series 2012A, Oct. 15, 2012
     -- Royal Bank Of Canada, Feb. 15, 2012
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