The rating assigned to North Carolina State Education Assistance Authority's (NCSEAA) taxable guaranteed student loan revenue bonds 2005 series P reflects the approximately 1.60% subordination of the series A and C subordinate lien bonds, the fully funded 3% reserve account, and the excess spread. The reserve account has a floor of $500,000. The ratings are further supported by a sound legal structure, federal reinsurance of at least 98% of loan principal and interest, and transaction features designed to protect bondholders. The 2005 series P bonds are issued on parity with approximately $1.9 billion of senior series bonds previously issued under the same indenture. The rating on the previously issued subordinate lien bonds reflects the 3% reserve account and the excess
