Oct 25 - Standard & Poor's Ratings Services today assigned its 'AA-/A-1+'
rating to NorthStar Student Loan Trust II's (the issuer's) adjustable-rate
student loan revenue bonds series 2012A.
The 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 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 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 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
-- Counterparty Risk Framework Methodology and Assumptions, May 31, 2012
-- Methodology And Assumptions: Approach To Evaluating Letter Of
Credit-Supported Debt, July 6, 2009
-- Presale: Northstar Student Loan Trust II - Series 2012A, Oct. 24, 2012
-- Royal Bank Of Canada, Feb. 15, 2012