Pennsylvania Higher Education Assistance Agency; General Obligation

S&P Global Ratings has lowered its issuer credit rating (ICR) on Pennsylvania Higher Education Assistance Agency (PHEAA) to 'AA-' from 'AA'. S&P Global Ratings also lowered its rating on PHEAA's series 2012 capital acquisition refunding bonds to 'AA-' from 'AA'. The outlook is negative. The downgrade and negative outlook reflect continued declines in core financial ratios, including profitability and leverage, especially as these metrics compare with peers'. Specifically, profitability as measured by return on average assets was 0.36% in 2018, while leverage (equity to assets) was 3.9%. These figures were 0.97% and 10.8%, respectively, in 2017. These results are primarily due to PHEAA's asset base continuing in runoff mode, following the conclusion of the federal government's Federal Family Education Loan

...S&P Global Ratings has lowered its issuer credit rating (ICR) on Pennsylvania Higher Education Assistance Agency (PHEAA) to '##-' from '##'. S&P Global Ratings also lowered its rating on PHEAA's series 2012 capital acquisition refunding bonds to '##-' from '##'. The outlook is negative. The downgrade and negative outlook reflect continued declines in core financial ratios, including profitability and leverage, especially as these metrics compare with peers'. Specifically, profitability as measured by return on average assets was 0.36% in 2018, while leverage (equity to assets) was 3.9%. These figures were 0.97% and 10.8%, respectively, in 2017. These results are primarily due to PHEAA's asset base continuing in runoff mode, following the conclusion of the federal government's Federal Family Education Loan Program (FFELP). The ICR reflects our view of PHEAA's strengths: + A dominant position in student lending; + Status as one of only three companies with a servicer contract awarded by the...

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