Fitch Upgrades ALL Student Loan Corporation Series II Trust Subordinate Bonds

Business Wire, April 25, 2008

NEW YORK -- Fitch Ratings has upgraded the following ratings for ALL Student Loan Corporation (ALLSLC) series II Trust:

--$18,800,000 subordinate class II-C-1 to 'AA' from 'A';

--$8,800,000 subordinate class II-C-2 to 'AA' from 'A'.

Fitch has upgraded the above-referenced student loan revenue bonds, as a result of its analysis pertaining to ALLSLC's planned conversion of the outstanding subordinate bonds from auction rate to fixed rate securities. Under the supplemental indentures (the 'Indentures'), the issuer may convert the bonds from the existing adjustable rate to another form of adjustable rate or a fixed rate with the exception of any conversion to a quarterly LIBOR rate.

The series II Trust collateral is comprised entirely of student loans originated under the Federal Family Education Loan Program (FFELP) with 48% of the loans in active repayment. On average, FFELP loans carry a 97% guarantee against defaulted principal and interest provided by the U.S. Federal Government. The trust portfolio is also comprised of approximately $18.5 million, or 3.9%, of loans receiving a minimum Special Allowance Payment (SAP) of 9.5%, although in its review, Fitch did not incorporate this benefit.

In addition to the strong credit characteristics of the collateral, the trust benefits from credit enhancement in the form of a debt service reserve fund, currently sized at 0.50% of the outstanding bonds with a minimum amount of $500,000, excess spread, and overcollateralization. Additionally, the ratings are based upon the sound legal structure of the transaction and the ability of the bonds to pay off by their legal final maturity under cash flow stress scenarios commensurate with the ratings categories for each class of bonds. As of Feb. 29, 2008, the trust's total and senior parity ratios are 100.59% and 105.90%, respectively.

The trust is permitted to acquire additional FFELP loans using funds deposited in its acquisition and recycling accounts through Jul. 1, 2008 and Jan. 1, 2009 respectively. Funds in the acquisition account can be used to purchase loans originated on or after Oct. 1, 2007. Currently, under the Indenture, loans receive SAP indexed to 90-day CP. As a result, of the enactment of the College Cost Reduction and Access Act of 2007 (CCRAA), post-Oct. 1, 2007 loans receive reduced SAP payments. For non-profit corporations such as ALLSLC, SAP rates were reduced 0.40% for Stafford and Consolidation Loans and reduced 0.70% for PLUS loans. This reduction generates lower yield and reduced excess spread, which is a primary source of credit enhancement available to the trust. In its review, Fitch assumed all additional FFELP loans purchased were post-Oct. 1, 2007 loans.

For more information on their most recent transaction, see the 'Access to Loans for Learning Student Loan Corporation, Series II 2007' new issue report, available to all investors on the Fitch Ratings web site www.fitchratings.com.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.