The New Hampshire Higher Education Loan Corp. has scheduled a sale of $522.6 million of taxable student loan-backed notes for this week.

The sale is earmarked for Thursday after a one-day retail period, according to Tara Payne, vice president for college planning and community engagement for NHHEAF Network Organizations, a consortium that includes the loan corporation.

Standard & Poor's has assigned a AA-plus rating to these bonds.

Proceeds will help refinance debt for the Concord-based nonprofit, which provides loans and other programs for students, families, and schools in New Hampshire. It offers loans through Stafford, Direct Plus, and direct consolidation programs, and private education loans.

The consortium also includes the New Hampshire Higher Education Assistance Foundation and Granite State Management & Resources.

"The savings from refinancing the debt are difficult to ascertain at this time. Our primary motivation to refinance this debt is to eliminate future interest rate risk associated with the failed auction-rate securities market," Payne said.

NHHELCO has $828.5 million in auction-rate securities debt, of which $717.75 million is senior debt.

It also has $327 million in a loan from the Straight-A Funding Conduit program, which was funded through the issuance of commercial paper, also rated triple-A. "The Straight-A commercial paper will not be refunded as part of this [floating rate note] transaction," Payne said.

Straight-A originated in 2009 as a partial industry solution when student loan issuers under the Federal Family Education Loan program had difficulty funding loans because of the credit freeze.

NHHELCO will sell the bonds in three tranches. Series A-1, for $213 million, matures in 2021. Series A-2, for $127 million, will mature in 2025 and Series A-3, for $182.6 million, will mature in 2037.

Closing date for the floating-rate notes, indexed to three months London Interbank Offered Rate, is Aug. 24, according to Payne.

Payne said the notes pay down sequentially as cash flows permit. She said notes can be redeemed at the end if the balance of student loans is reduced to 10% of the original pool balance.

RBC Capital Markets and UBS Investment Bank are joint lead managers. Wells Fargo Bank is trustee. Baker Newman & Noyes LLC is the auditing firm. Hinckley, Allen & Snyder LLP is counsel for the loan corporation and Ballard Spahr LLP is counsel for the underwriters. Chapman and Cutler LLP is representing Wells Fargo.

No swaps or insurance are involved.

According to the preliminary statement, roughly 89% of loans granted are for four-year universities.

The network began in 1962, when 23 students received the first Higher Education Loan Program loan guaranteed by NHHEAF.

The maximum loan amount at the time was $500.

Since then, the foundation has distributed more than $31.2 million of financial aid and is now the state's largest source of independent student aid.

It expanded after passage of the federal Higher Education Act of 1965, which increased federal money given to universities and created scholarships and low-interest rates for students.

Cutbacks in student aid generated headlines six weeks ago, when Gov. John Lynch let New Hampshire's two-year, $10.2 billion budget become law without his signature. Lynch spoke out against the spending plan's deep cuts to higher education the Legislature imposed.

The legislature cut $110 million from higher education, nearly 50% from the university system, and 20% from the community college system.

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