NHHELCO buys $588m bonds in Dutch auction


The New Hampshire Higher Education Loan Corp. has purchased more than $588 million in bonds through a modified Dutch auction.NHHELCO announced on June 22 that it purchased $588,350,000 in bonds, representing 41 percent of the total outstanding principal amount of bonds. This amount is actually a bit higher than the maximum of $525 million the organization said it would pay in a May 24 press release that announced the auction.In the Dutch auction, NHHELCO set a maximum purchase price of $1,000, selecting bonds at the lowest price first and continuing to accept offers at prices in ascending order until it selected the amount of bonds of each series that it determined to purchase. "The clearing price for any series was the highest price for any bonds of that series that were accepted for purchase by the corporation," according to NHHELCO.Bond groups included New Hampshire Health and Education Facilities Authority, Education Loan Revenue Bonds,New Hampshire Higher Education Loan Corporation Issues, and New Hampshire Higher Education Loan Corporation Education Loan Revenue bonds.According to the press release more than $1.4 billion in bonds were aggregated by holding firm D.F. King & Co. of New York, which oversaw the auction.The results of the auction set five series of bonds at $957.50 per bond, another three series of bonds at $850 per bond, and six more series at $825.NHHELCO said any tendered bonds that it did not accept would be returned to their bondholders. In March, legislation added to the federal health-care reform bill contained provisions that ended private nonprofits from originating federal student loans, essentially making NHHELCO and the two other NHHEAF Network organizations – New Hampshire Higher Education Assistance Foundation and Granite State Management & Resources – scrambling for a new business model.While the NHHEAF Network will continue to service Federal Family Education Loan Program, or FFEL, loans originated through June 30, it cannot make any new FFEL loans after July 1. New FFEL student loans will be originated through the U.S. Department of Education’s Direct Loan Program.As of March 31, NHHELCO had $1.379 billion in outstanding principal balance, with $1.4 billion in assets and 242,884 loans, according the organization’s Web site. – CINDY KIBBE/NEW HAMPSHIRE BUSINESS REVIEW
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