FFELP Help

Many FFELPs issues are like the tortoise: solid and strong, but slow. Unfortunately, though nearly bulletproof from a credit perspective because of 97pct government guarantees, a variety of these FFELP bonds face technical default because of a slowdown in the prepayment behavior of pool borrowers since issuance. Slow and steady will not win the race, sadly, because failure to fully pay down principal by the maturity date under the indentures will trigger an Event of Default.  And recognizing this possibility, Moodys is considering downgrading a group of these bonds.

A bulletproof bond is a terrible thing to waste. What can be done? Our contacts tell us that investors may need to work together to vote for a maturity extension in order to avoid the technical default.

If you are interested in FFELP help, email info at dealvector dot com to add your name to our list of motivated investors.