SOURCE: Pennsylvania Higher Education Assistance Agency

July 14, 2011 12:16 ET

Pennsylvania Higher Education Assistance Agency Announces Closing of Tender Offer With Respect to Certain of Its Student Loan Revenue Bonds

HARRISBURG, PA--(Marketwire - Jul 14, 2011) - The Pennsylvania Higher Education Assistance Agency (the "Agency") today announced the closing, on July 14, 2011 of its tender offer (the "Offer") to purchase $2,300,000,000 Auction Rate Bonds, for cash (the "Offer to Purchase"), with respect to certain of the outstanding auction rate Student Loan Revenue Bonds (collectively the "Auction Rate Bonds") issued pursuant to the Indenture of Trust dated August 1, 1997, as amended and supplemented, between the Agency and Manufacturers and Traders Trust Company, as trustee (the "Indenture").

Bondholder Communications Group LLC, the tender and information agent with respect to the Offer advised the Agency that as of the expiration of the Offer to Purchase at 5:00, Eastern time on June 21, 2011, a total of $2,322,725,000.00 principal amount of Auction Rate Bonds had been validly tendered. In accordance with the terms and conditions of the Offer to Purchase, the Agency purchased $2,300,000,000.00 principal amount of the Auction Rate Bonds on July 14, 2011. The remaining $3,698,700,000 principal amount of the Auction Rate Bonds that were not tendered or purchased pursuant to the Offer currently remain outstanding and the holders thereof are subject to the terms of the Indenture.

Commenting on the results of the Offer, James L. Preston, President and Chief Executive Officer of the Agency, stated, "We are pleased with the success of the tender offer. The completion by the Agency of the tender offer was an important step and we believe the transaction made sense for the Agency and the Bondholders going forward."

Morgan Stanley & Co. LLC served as dealer manager for the Offer.

Bondholder Communications Group LLC served as tender and information agent for the Offer.

This press release is for informational purposes only and is not an offer to purchase or a solicitation of an offer to purchase with respect to any Auction Rate Bonds.

About the Pennsylvania Higher Education Assistance Agency

Created in 1963 by the Pennsylvania General Assembly, the Agency has evolved into one of the nation's leading student aid organizations. Today, the Agency is a national provider of student financial aid services, serving millions of students and thousands of schools through its loan guaranty, loan servicing, financial aid processing, outreach, and other student aid programs.

The Agency's earnings are used to support its public service mission and to pay its operating costs, including administration of the Pennsylvania State Grant and other state-funded student aid programs. The Agency continues to devote its energy, resources, and imagination to developing innovative ways to ease the financial burden of higher education for students, families, schools, and taxpayers.

The Agency conducts its student loan servicing activities nationally as American Education Services and FedLoan Servicing.

Forward-Looking Statements

Forward-looking statements in this press release are based on current expectations. This press release contains forward-looking statements that involve a variety of business risks and other uncertainties that could cause actual results to differ materially. Words such as "expects," "intends," "plans," "projects," "believes," "estimates" and similar expressions are used to identify these forward-looking statements. These statements are not guarantees of future performance and involve risks, uncertainties, and assumptions that are difficult to predict. Forward-looking statements are based upon assumptions as to future events that may not prove to be accurate. Actual outcomes and results may differ materially from what is expressed or forecast in these forward-looking statements. Forward-looking statements speak only as of the date made. There is no obligation to update any forward-looking statements to reflect the events or circumstances arising after the date as of which they are made. As a result of these risks and uncertainties, readers are cautioned not to place undue reliance on the forward-looking statements included in this release or that may be made elsewhere from time to time by, or on behalf of, the Agency.