Access Group Inc Offering Memorandum Federal Student Loan Asset-Backed Notes

July 15, 2015

Access Group, Inc. Announces Intentions Regarding Series 2004-2 Class A-2 Notes; Offering Memorandum Notice

WEST CHESTER, Pa., July 15, 2015 /PRNewswire/ —¬†Access Group, Inc. (“AGI”), as issuer of the Federal Student Loan Asset-Backed Notes, Series 2004-2 (the “Series 2004-2 Notes” or the “Notes”), announced today that it has completed a review of available options for supplementing the cash inflows available to pay the Notes. This review was undertaken to analyze alternative methods to ensure full and timely repayment of the Series 2004-2, Class A-2 Notes on or before their Final Maturity Date.

On October 21, 2004, AGI issued $767,472,000 of Series 2004-2 Notes. This non-recourse debt was issued in six classes of Notes and each class was assigned a specified Final Maturity Date, i.e., the date on which all remaining principal of that particular class becomes due and payable. Selected information about the Series 2004-2 Notes, as of July 14, 2015, is presented in the following table:

Class Original Balance Current Balance Final Maturity Date
Class A-1 $ 221,000,000    Paid in Full July 25, 2012
Class A-2 $ 202,100,000 $  89,108,428 January 25, 2016
Class A-3 $ 164,000,000 $ 164,000,000 October 25, 2024
Class A-4 $ 109,000,000 $ 109,000,000 April 26, 2032
Class A-5 $  33,000,000 $  33,000,000 January 26, 2043
Class B $  38,372,000 $  31,103,248 January 26, 2043
$ 767,472,000 $ 426,211,677


Class A-1 was retired in full on January 25, 2012. Upon the retirement of Class A-1, Class A-2 began amortizing and approximately 55.9% of the Original Balance has been repaid.

AGI is aware of the impending Class A-2 Final Maturity Date and the likelihood that, absent a material acceleration, cash flows generated by the underlying FFEL program student loans may be insufficient to fully redeem the Class A-2 Notes on or prior to their Final Maturity Date. Due to this, AGI is announcing its intention to deposit additional funds into the Series 2004-2 Notes Collection Account in an amount sufficient to fully redeem the Class A-2 Notes on their Final Maturity Date.

Any cash injections to the Series 2004-2 Notes undertaken by AGI will be funded using unrestricted funds available from AGI’s corporate cash or investments. Currently, AGI has reserved $59.35 million for redemption of the Class A-2 Notes. As of June 30, 2015, AGI had $79.8 million of cash and $382.3 million of investments, on an unaudited basis.

The Series 2004-2 Notes are structured to allow for defeasance of the Notes reaching Final Maturity. As described on page 68 of the Offering Memorandum (emphasis added):

The obligations … will be fully discharged and satisfied as to any Note and such Note will no longer be deemed to be Outstanding … when payment of the principal of such Note, plus interest on such principal to the due date thereof, either (a) shall have been made in accordance with the terms of the Indenture, or (b) in the case of a Note to be redeemed or paid at [Final] maturity on the next Quarterly Payment Date, shall have been provided for by irrevocably depositing with the Trustee exclusively for such payment, moneys sufficient to make such payment.

A full copy of the Offering Memorandum may be found by signing into the Access Group Investor website provides institutional-quality offering prospectus, offering memorandum and related private placement document preparation and writing services. professional fees are typically 50% lower vs. prices charged by traditional law firms. Schedule Your Free Consultation Today.

Additionally, the Offering Memorandum under “Description of the Indenture – Distribution of Available Funds” describes the payment priority for any Class of Notes reaching Final Maturity on a given payment date, which is separate and distinct from the Principal Distribution Amount. In accordance with the Note payment priorities, found on page 60 of the Offering Memorandum, repayment of Notes on a Final Maturity date occurs in step three; after payment of fees and interest on Class A Notes, thus receiving priority over all other payments.

Immediately following any potential cash infusion repaying the Class A-2 Notes, the Series 2004-2 Notes would have a Total Asset Percentage significantly higher than the required 101%. Therefore, the Principal Distribution Amount for immediately subsequent periods would be greatly reduced or eliminated until the Total Asset Percentage decreases to 101%. Consequently, principal distributions available to the Notes would be lower than would be the case absent the expedited retirement of Class A-2 Notes.

AGI has determined that a cash deposit to the Indenture is the best option available to effect repayment of the Class A-2 Notes on the Final Maturity Date. AGI may change the intended course of action regarding the Notes and is under no obligation to undertake any action to accelerate redemption on the Class A-2 Notes. This announcement should not be construed as either a binding obligation of AGI or an assurance AGI will undertake any action regarding the redemption of either Class A-2 Notes, or any of the Series 2004-2 Notes.

About Access Group:

Founded in 1983, Access Group, Inc. is a nonprofit membership organization comprised of 199 nonprofit and state-affiliated ABA-approved law schools. The organization works to further access, affordability, and the value of legal education, specifically, and graduate and professional education more broadly, through research, policy advocacy, and direct member and student educational services. Access Group is headquartered in West Chester, PA, and maintains an office in Washington, DC.


SOURCE Access Group, Inc.

Access Group Inc  Offering Memorandum Federal Student Loan Asset-Backed Notes