Fitch Rates Brazos Student Finance Corp. Series 2004 Notes

Business Wire, Feb 26, 2004

Business Editors

NEW YORK--(BUSINESS WIRE)--Feb. 26, 2004

Fitch rates the following Student Loan Asset-Backed Notes issued by Brazos Student Finance Corp.:

Ratings for new issuance

-- $100,000,000 Student Loan Asset-Backed Notes, Senior Series

2004A-1, 'AAA';

-- $100,000,000 Student Loan Asset-Backed Notes, Senior Series

2004A-2, 'AAA';

-- $100,000,000 Student Loan Asset-Backed Notes, Senior Series

2004A-3, 'AAA';

-- $100,000,000 Student Loan Asset-Backed Notes, Senior Series

2004A-4, 'AAA';

-- $94,000,000 Student Loan Asset-Backed Notes, Senior Series

2004A-5, 'AAA';

-- $92,000,000 Student Loan Asset-Backed Notes, Senior Series

2004A-6, 'AAA';

-- $92,000,000 Student Loan Asset-Backed Notes, Senior Series

2004A-7, 'AAA';

-- $92,000,000 Student Loan Asset-Backed Notes, Senior Series

2004A-8, 'AAA';

-- $75,000,000 Student Loan Asset-Backed Notes, Subordinate Series

2004B-1, 'A';

-- $75,000,000 Student Loan Asset-Backed Notes, Subordinate Series

2004B-2, 'A'.

Ratings affirmed for existing debt:

-- $82,200,000 Student Loan Asset-Backed Notes, Senior Series

2001A-3, 'AAA';

-- $82,200,000 Student Loan Asset-Backed Notes, Senior Series

2001A-4, 'AAA';

-- $45,000,000 Student Loan Asset-Backed Notes, Senior Series

2001A-5, 'AAA';

-- $16,300,000 Student Loan Asset-Backed Notes, Junior Subordinate

Series 2001C-1, 'NR';

-- $107,000,000 Student Loan Asset-Backed Notes, Senior Series

2002A-1, 'AAA';

-- $107,000,000 Student Loan Asset-Backed Notes, Senior Series

2002A-2, 'AAA';

-- $30,000,000 Student Loan Asset-Backed Notes, Senior Series

2002A-3, 'AAA';

-- $61,000,000 Student Loan Asset-Backed Notes, Senior Series

2002A-4, 'AAA'.

Fitch rates the Senior Series 2004A-1 thru A-8 Notes 'AAA' and the Subordinate Series 2003B-1 and B-2 Notes 'A'. The ratings are based on the quality of the student loan portfolio, the credit enhancement provided, and the sound legal structure. The ratings reflect the ability of the trust to redeem notes at maturity and pay timely interest. The ratings do not address the ability of the trust to pay carry-over interest, nor do they address the ability of auction rate noteholders to successfully redeem their notes at an auction now or in the future.

The Series 2004 Notes are issued under the Indenture of Trust dated February 1, 2004. The proceeds of the Series 2004 Notes will be used to purchase student loans, redeem the Series 2001 and Series 2002 Notes, make deposits to the acquisition and reserve funds, and to pay the costs of issuance.

The Series 2004 Notes are taxable, 28-day auction rate securities with interest payable on the first business day following each auction period. The legal final maturity date is March 1, 2040.

The collateral securing the notes consists of government guaranteed Federal Family Education Loan Program (FFELP) student loans and Health Education Assistance Loans (HEAL), and credit underwritten Maximizer student loans and Education Investment Company, L.L.C. (EIC) loans. The FFELP loans are guaranteed 100% or 98% by an eligible guarantor and re-insured by the U.S. Department of Education depending on their disbursement date. The HEAL loans were disbursed to graduate students enrolled in an approved health discipline and are guaranteed 100% less litigation costs by the Secretary of Health and Human Services. The remainder of the collateral consists of private loans. The Maximizer loans are originated and managed by Bank of America, N.A. The Maximizer loans are made to United States undergraduate and graduate students attending four or five year accredited degree granting institutions of higher education that qualify for Title IV programs under the Higher Education Act. The EIC loans are marketed by Education Investment Company, L.L.C., and originated by Richland Loan Processing Center, Inc. The EIC loans are made to United States, Canadian, and qualifying foreign citizens who are enrolled in approved medical, chiropractic and veterinary schools.

Brazos Student Finance Corporation, a 501(c)(3) non-profit corporation organized in 1985 under the Texas Non-Profit Corporation Act. The Corporation is affiliated with Brazos Higher Education Service Corporation, and Brazos Higher Education Authority, Inc.

Brazos Higher Education Service Corporation, Inc. is the master servicer and will oversee the duties of the subservicers. The subservicers for the transaction are ACS Education Services, Inc., CFS-SunTech Servicing LLC, Great Lakes Educational Loan Services, Inc., Pennsylvania Higher Education Assistance Agency, and Sallie Mae Servicing L.P. Pennsylvania Higher Education Assistance Agency is the subservicer for the Health Education Assistance Loans.

Banc of America Securities LLC is the lead underwriter on this transaction.