Connecticut Student Loan Foundation offers to buy auction-rate bonds

By Angela McDaniels

Tacoma, Wash., Sept. 2 - The Connecticut Student Loan Foundation is offering to purchase some of its auction-rate education loan revenue bonds, according to a notice from the foundation.

The notes eligible for the offer are the foundation's:

• $75 million series 2004A-1 senior bonds due June 1, 2034;

• $75 million series 2004A-2 senior bonds due June 1, 2034;

• $75 million series 2004A-3 senior bonds due June 1, 2034;

• $75 million series 2004A-4 senior bonds due June 1, 2034;

• $75 million series 2004A-5 senior bonds due June 1, 2034;

• $71 million series 2004A-6 senior bonds due June 1, 2034;

• $60 million series 2004A-7 senior bonds due June 1, 2034;

• $80 million series 2006A-1 senior bonds due June 1, 2046;

• $100 million series 2006A-2 senior bonds due June 1, 2046;

• $60 million series 2007A-1 senior bonds due June 1, 2047;

• $50 million series 2007A-3 senior bonds due Dec. 1, 2047;

• $62.9 million series 2004B subordinate bonds due June 1, 2034;

• $20 million series 2006B subordinate bonds due June 1, 2046;

• $20 million series 2007B subordinate bonds due June 1, 2047; and

• $36.9 million series 2007B-2 subordinate bonds due Dec. 1, 2042.

Holders who wish to tender must specify a purchase price that is no more than $890 per $1,000 principal amount of bonds.

The foundation said it will spend up to $40 million on the offer. If the total purchase price of the bonds tendered is more than $40 million, offered bonds will be selected in order of increasing offer price, beginning with the lowest offer price received, until the cap is reached.

Holders will also receive accrued interest through the day before the settlement date.

The offer will expire at 5 p.m. ET on Oct. 2, and the settlement date is expected to be Oct. 9.

On Aug. 7, the foundation received a notice from the bond trustee, Bank of New York Mellon Trust Co., NA, that the foundation had failed to file an annual report for the fiscal year ended Sept. 30, 2008 by the March 29 deadline. The foundation has until Nov. 5 to prevent an event of default from occurring.

The foundation said it plans to file the report before Nov. 5, but it noted that if an event of default were to occur, it would likely adversely affect the market value of the bonds.

Samuel A. Ramirez & Co., Inc. (call Neal Richardson at 212 378-7121) is the dealer manager.

The foundation is located in Rocky Hill, Conn.

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