Moody’s Investors Service upgraded a long-term letter-of-credit backed rating to Aa2 from A1 and confirmed the short-term VMIG 1 rating of the Vermont Student Assistance Corp.’s education loan senior revenue bonds, Series 2008C-1 and C-2.

The rating, on review for possible downgrade, comes in conjunction with the substitution of the existing LOC, provided by Lloyds TSB Bank Plc, with a new LOC to be provided by State Street Bank and Trust Co.

Moody’s said the ratings will be based upon the irrevocable direct-pay LOC provided by State Street Bank, the structure of the transaction that provides for timely debt services and purchase price payments to investors, and the agency’s evaluation of the creditworthiness of the bank.

The bank’s long-term and short-term other senior obligations are rated by Moody’s at Aa2 and P-1, respectively.

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