Bank of America Student Loan Trust 2010-1 Bank of America Student Loan Securitization ...

186 Pages·2010·0.61 MB·English

THIS OFFERING MEMORANDUM (THIS “OFFERING MEMORANDUM”) IS BEING PROVIDED ONLY TO (1) ”QUALIFIED INSTITUTIONAL
BUYERS” (“QIBs”) AS DEFINED IN RULE 144A (“RULE 144A”) PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”), OR (2) NON-U.S. PERSONS OUTSIDE THE UNITED STATES OF AMERICA PURSUANT TO THE
REQUIREMENTS OF REGULATION S PROMULGATED UNDER THE SECURITIES ACT (“REGULATION S”). REPRODUCTION OR
FURTHER DISTRIBUTION OF THIS OFFERING MEMORANDUM IS FORBIDDEN. THE OFFERING OF THE NOTES DESCRIBED IN THIS
OFFERING MEMORANDUM WILL NOT BE REGISTERED UNDER THE SECURITIES ACT, ANY UNITED STATES STATE SECURITIES OR
“BLUE SKY” LAWS OR ANY SECURITIES LAWS OF ANY OTHER JURISDICTION.

OFFERING MEMORANDUM
$1,231,596,000
Bank of America Student Loan Trust 2010-1
Issuing Entity
Bank of America Student Loan Securitization Corporation
Depositor
Bank of America, National Association
Sponsor, Master Servicer and Administrator

Student Loan-Backed Notes
On or about July 9, 2010, the trust will issue:
Class Principal Interest Rate Maturity
Floating Rate Class A Notes $1,231,596,000 three-month LIBOR plus 0.80% February 25, 2043

The trust will make payments primarily from collections on a pool of FFELP loans. Interest and principal on the notes will be paid quarterly on
the 25th day of each January, April, July and October, beginning in October 2010. Credit enhancement for the notes consists of excess interest
on the trust student loans, overcollateralization and cash on deposit in a reserve account, as described in this offering memorandum. In
addition, the trust will deposit funds, on the closing date, into a capitalized interest account. These funds will be available only for a limited
period of time. The interest rate on the notes will be determined by reference to LIBOR. A description of how LIBOR is determined appears
under “Description of the Notes—Determination of Indices—LIBOR” in this offering memorandum.
Other than as provided in this offering memorandum, no person has been authorized to give any information or to make any representations
other than as contained in this offering memorandum and, if given or made, such information or representations must not be relied upon. This
offering memorandum does not constitute an offer to sell, or a solicitation of an offer to buy, any securities other than the notes, nor an offer of
such securities to any person in any state or other jurisdiction in which it is unlawful to make such offer or solicitation. The delivery of this
offering memorandum at any time does not imply that the information in this offering memorandum is correct as of any time subsequent to its
date.
The notes have not been approved or disapproved by the Securities and Exchange Commission, any state securities commission or
any other regulatory authority, nor have any of the foregoing authorities passed upon or endorsed the merits of this offering or the
accuracy or adequacy of this offering memorandum. Any representation to the contrary is a criminal offense.
The information contained in this offering memorandum is intended for use solely by QIBs as defined in Rule 144A or non-U.S. Persons outside
the United States pursuant to the requirements of Regulation S to whom this document is delivered, and may not be reproduced in whole or in
part.
We are offering the notes through the initial purchasers when and if issued. Application has been made to the Irish Stock Exchange for the
notes to be admitted to the official list and trading on its regulated market.
We are not offering the notes in any state or other jurisdiction where the offer is prohibited.
You should consider carefully the risk factors beginning on page 15 of this offering memorandum.
The notes are asset-backed securities issued by, and are obligations of, the issuing entity, which is a trust. They are not obligations of or
interests in the sponsor, the administrator, the indenture trustee, the eligible lender trustee, the Delaware trustee, the paying agent, the master
servicer, the subservicer, the calculation agent, the depositor, the initial purchasers, or any of their affiliates.
The notes are not guaranteed or insured by the United States or any governmental agency.
____________________________________
Initial Purchaser and Book-Runner
BofA Merrill Lynch
________________________

Initial Purchasers and Co-Managers

Barclays Capital Credit Suisse J.P. Morgan RBS
_______________________________
August 3, 2010
THE INFORMATION IN THIS OFFERING MEMORANDUM, IF CONVEYED PRIOR TO THE TIME
OF YOUR COMMITMENT TO PURCHASE ANY NOTES, SUPERSEDES ANY INFORMATION
CONTAINED IN ANY PRIOR OFFERING MEMORANDUM RELATING TO THE NOTES.
THIS OFFERING MEMORANDUM CONSTITUTES A PROSPECTUS (THE “PROSPECTUS”) FOR
THE PURPOSES OF DIRECTIVE 2003/71/EC (THE “PROSPECTUS DIRECTIVE”).
REFERENCES THROUGHOUT THIS DOCUMENT TO THE “OFFERING MEMORANDUM” SHALL
BE TAKEN TO READ “PROSPECTUS” FOR SUCH PURPOSE. THE PROSPECTUS HAS BEEN
APPROVED BY THE IRISH FINANCIAL REGULATOR AS COMPETENT AUTHORITY UNDER
THE PROSPECTUS DIRECTIVE. THE IRISH FINANCIAL REGULATOR ONLY APPROVES THIS
PROSPECTUS AS MEETING THE REQUIREMENTS IMPOSED UNDER IRISH AND EU LAW
PURSUANT TO THE PROSPECTUS DIRECTIVE. SUCH APPROVAL RELATES ONLY TO THE
NOTES WHICH ARE TO BE ADMITTED TO TRADING ON THE REGULATED MARKET OF THE
IRISH STOCK EXCHANGE OR OTHER REGULATED MARKETS FOR THE PURPOSES OF
DIRECTIVE 2004/39/EC OR WHICH ARE TO BE OFFERED TO THE PUBLIC IN ANY MEMBER
STATE OF THE EUROPEAN ECONOMIC AREA.
THIS PROSPECTUS HAS BEEN PREPARED SOLELY FOR THE PURPOSE OF THE
APPLICATION TO THE IRISH STOCK EXCHANGE FOR THE NOTES TO BE ADMITTED TO THE
OFFICIAL LIST AND TRADING ON ITS REGULATED MARKET AND SHALL NOT BE USED OR
DISTRIBUTED FOR ANY OTHER PURPOSES. THIS PROSPECTUS DOES NOT CONSTITUTE
AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, ANY OF THE NOTES. ANY
SUCH OFFER OR SOLICITATION MAY ONLY BE MADE ON THE BASIS OF THE OFFERING
MEMORANDUM DATED JULY 2, 2010 RELATING TO, AND PREPARED IN CONNECTION WITH
THE OFFER AND SALE OF, THE NOTES.
NOTICE TO NEW HAMPSHIRE RESIDENTS: NEITHER THE FACT THAT A REGISTRATION
STATEMENT OR AN APPLICATION FOR A LICENSE HAS BEEN FILED UNDER NEW
HAMPSHIRE REVISED STATUTES ANNOTATED, CHAPTER 421-B (“RSA 421-B”), WITH THE
STATE OF NEW HAMPSHIRE NOR THE FACT THAT A SECURITY IS EFFECTIVELY
REGISTERED OR A PERSON IS LICENSED IN THE STATE OF NEW HAMPSHIRE
CONSTITUTES A FINDING BY THE SECRETARY OF STATE OF NEW HAMPSHIRE THAT ANY
DOCUMENT FILED UNDER RSA 421-B IS TRUE, COMPLETE AND NOT MISLEADING.
NEITHER ANY SUCH FACT NOR THE FACT THAT AN EXEMPTION OR EXCEPTION IS
AVAILABLE FOR A SECURITY OR A TRANSACTION MEANS THAT THE SECRETARY OF
STATE HAS PASSED IN ANY WAY UPON THE MERITS OR QUALIFICATIONS OF, OR
RECOMMENDED OR GIVEN APPROVAL TO, ANY PERSON, SECURITY, OR TRANSACTION. IT
IS UNLAWFUL TO MAKE, OR CAUSE TO BE MADE, TO ANY PROSPECTIVE PURCHASER,
CUSTOMER, OR CLIENT ANY REPRESENTATION INCONSISTENT WITH THE PROVISIONS OF
THIS PARAGRAPH.NOTICES TO INVESTORS
THE NOTES MAY NOT BE OFFERED OR SOLD TO PERSONS IN THE UNITED KINGDOM IN A
TRANSACTION THAT RESULTS IN AN OFFER TO THE PUBLIC WITHIN THE MEANING OF THE
SECURITIES LAWS OF THE UNITED KINGDOM.
THIS OFFERING OF THE NOTES WILL NOT BE REGISTERED UNDER THE SECURITIES ACT,
ANY UNITED STATES STATE SECURITIES OR “BLUE SKY” LAWS OR ANY SECURITIES
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LAWS OF ANY OTHER JURISDICTION, AND UNLESS THE NOTES ARE REGISTERED MAY
NOT BE OFFERED OR SOLD, EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, ANY APPLICABLE UNITED STATES STATE SECURITIES OR “BLUE SKY”
LAWS OR ANY SECURITIES LAWS OF ANY OTHER JURISDICTION. ACCORDINGLY, THE
NOTES ARE BEING OFFERED AND SOLD BY THE INITIAL PURCHASERS ONLY TO (1) A
LIMITED NUMBER OF QIBS TO WHOM THIS OFFERING MEMORANDUM HAS BEEN
FURNISHED IN RELIANCE ON RULE 144A AND IN ACCORDANCE WITH ANY APPLICABLE
LAWS OF ANY STATE OF THE UNITED STATES, AND (2) NON-U.S. PERSONS OUTSIDE THE
UNITED STATES OF AMERICA PURSUANT TO THE REQUIREMENTS OF REGULATION S.
THERE IS NO UNDERTAKING TO REGISTER THE NOTES UNDER ANY UNITED STATES
STATE OR FEDERAL SECURITIES LAWS OR ANY SECURITIES LAWS OF ANY OTHER
JURISDICTION ON ANY FUTURE DATE.
NO ACTION HAS BEEN OR WILL BE TAKEN BY THE DEPOSITOR OR THE INITIAL
PURCHASERS THAT WOULD PERMIT A PUBLIC OFFERING OF THE NOTES IN ANY
COUNTRY OR JURISDICTION WHERE ACTION FOR THAT PURPOSE IS REQUIRED.
ACCORDINGLY, THE NOTES MAY NOT BE OFFERED OR SOLD, DIRECTLY OR INDIRECTLY,
AND NONE OF THIS OFFERING MEMORANDUM, OR ANY CIRCULAR, OFFERING
MEMORANDUM, FORM OF APPLICATION, ADVERTISEMENT OR OTHER MATERIAL MAY BE
DISTRIBUTED IN OR FROM OR PUBLISHED IN ANY COUNTRY OR JURISDICTION, EXCEPT
UNDER CIRCUMSTANCES THAT WILL RESULT IN COMPLIANCE WITH ANY APPLICABLE
LAWS AND REGULATIONS. PERSONS INTO WHOSE HANDS ALL OR ANY PART OF THIS
OFFERING MEMORANDUM COME ARE REQUIRED BY THE DEPOSITOR AND THE INITIAL
PURCHASERS TO COMPLY WITH ALL APPLICABLE LAWS AND REGULATIONS IN EACH
COUNTRY OR JURISDICTION IN WHICH THEY PURCHASE, SELL OR DELIVER THE NOTES
OR HAVE IN THEIR POSSESSION OR DISTRIBUTE THIS OFFERING MEMORANDUM, IN ALL
CASES AT THEIR OWN EXPENSE.
THE NOTES CANNOT BE RESOLD UNLESS THEY ARE SUBSEQUENTLY REGISTERED OR AN
EXEMPTION FROM REGISTRATION IS AVAILABLE. FOR A DESCRIPTION OF CERTAIN
RESTRICTIONS ON RESALES AND TRANSFERS, SEE “DESCRIPTION OF THE NOTES—
TRANSFER RESTRICTIONS” HEREIN.
EACH INITIAL AND SUBSEQUENT PURCHASER OF THE NOTES WILL BE DEEMED BY ITS
ACCEPTANCE OF SUCH NOTES TO HAVE MADE CERTAIN ACKNOWLEDGEMENTS,
REPRESENTATIONS AND AGREEMENTS INTENDED TO RESTRICT THE RESALE OR OTHER
TRANSFER THEREOF AS SET FORTH THEREIN AND DESCRIBED IN THIS OFFERING
MEMORANDUM AND, IN CONNECTION THEREWITH, MAY BE REQUIRED TO PROVIDE
CONFIRMATION OF ITS COMPLIANCE WITH SUCH RESALE AND OTHER TRANSFER
RESTRICTIONS IN CERTAIN CASES. SEE “DESCRIPTION OF THE NOTES—TRANSFER
RESTRICTIONS” HEREIN.
ALTHOUGH APPLICATION HAS BEEN MADE TO ADMIT THE NOTES TO THE IRISH STOCK
EXCHANGE, THERE IS NO MARKET FOR THE NOTES BEING OFFERED HEREBY AND THERE
IS NO ASSURANCE THAT ONE WILL DEVELOP. THE INITIAL PURCHASERS EXPECT, BUT
ARE NOT OBLIGATED, TO MAKE A MARKET IN THE NOTES SOLELY TO FACILITATE
TRADING AMONG QIBS (UNDER RULE 144A) AND/OR NON-U.S. PERSONS (PURSUANT TO
THE REQUIREMENTS OF REGULATION S). THERE IS NO ASSURANCE THAT SUCH MARKET,
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IF DEVELOPED, WILL CONTINUE. RESALES OF THE NOTES MAY BE MADE ONLY
PURSUANT TO A VALID REGISTRATION STATEMENT, PURSUANT TO RULE 144A,
PURSUANT TO REGULATION S OR PURSUANT TO ANOTHER EXEMPTION AVAILABLE
UNDER THE SECURITIES ACT. ALL TRANSFERS OF THE NOTES ARE SUBJECT TO
CERTAIN OTHER RESTRICTIONS DESCRIBED HEREIN. SEE “DESCRIPTION OF THE
NOTES—TRANSFER RESTRICTIONS” HEREIN.
THE NOTES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, ANY STATE SECURITIES COMMISSION OR ANY OTHER
REGULATORY AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED
UPON OR ENDORSED THE MERITS OF THIS OFFERING OR THE ACCURACY OR ADEQUACY
OF THIS OFFERING MEMORANDUM. ANY REPRESENTATION TO THE CONTRARY IS
UNLAWFUL.
THIS OFFERING MEMORANDUM HAS BEEN PREPARED BY THE DEPOSITOR. NONE OF THE
INDENTURE TRUSTEE, THE ELIGIBLE LENDER TRUSTEE, THE DELAWARE TRUSTEE, THE
MASTER SERVICER, THE SUBSERVICER, THE ADMINISTRATOR, THE CALCULATION AGENT
OR THE INITIAL PURCHASERS MAKE ANY REPRESENTATIONS OR WARRANTIES AS TO
THE ACCURACY OR COMPLETENESS OF THE INFORMATION CONTAINED IN THIS
OFFERING MEMORANDUM, AND NOTHING HEREIN SHALL BE DEEMED TO CONSTITUTE
SUCH A REPRESENTATION OR WARRANTY BY THE INDENTURE TRUSTEE, THE ELIGIBLE
LENDER TRUSTEE, THE DELAWARE TRUSTEE, THE MASTER SERVICER, THE
SUBSERVICER, THE ADMINISTRATOR, THE CALCULATION AGENT OR THE INITIAL
PURCHASERS. NOTHING HEREIN SHALL BE DEEMED TO CONSTITUTE A PROMISE OR
REPRESENTATION AS TO THE FUTURE PERFORMANCE OF THE DEPOSITOR, THE TRUST,
THE TRUST STUDENT LOANS OR THE NOTES.
IT IS EXPECTED THAT INVESTORS INTERESTED IN PURCHASING THE NOTES WILL
CONDUCT THEIR OWN INDEPENDENT INVESTIGATION OF THE RISKS POSED BY AN
INVESTMENT IN THE NOTES. REPRESENTATIVES OF THE DEPOSITOR, THE MASTER
SERVICER, THE TRUST, THE ADMINISTRATOR AND THE INITIAL PURCHASERS WILL BE
AVAILABLE TO ANSWER QUESTIONS CONCERNING THE NOTES, THE TRUST AND THE
TRUST STUDENT LOANS FROM INVESTORS INTERESTED IN PURCHASING THE NOTES.
REPRESENTATIVES OF THE SUBSERVICER WILL OFFER A PRESENTATION REGARDING
THE SERVICING OF THE TRUST STUDENT LOANS PURSUANT TO AN ADDITIONAL
NOTIFICATION AS PROVIDED BY THE INITIAL PURCHASERS.
THE NOTES DO NOT REPRESENT AN OBLIGATION OF OR INTEREST IN THE SPONSOR, THE
DEPOSITOR, THE INDENTURE TRUSTEE, THE ELIGIBLE LENDER TRUSTEE, THE DELAWARE
TRUSTEE, THE MASTER SERVICER, THE SUBSERVICER, THE ADMINISTRATOR, THE
CALCULATION AGENT OR THE INITIAL PURCHASERS OR ANY OF THEIR RESPECTIVE
AFFILIATES, OTHER THAN THE TRUST.
THIS OFFERING MEMORANDUM DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE NOTES OFFERED
HEREBY NOR AN OFFER OF SUCH OFFERED SECURITIES TO ANY PERSON IN ANY STATE
OR OTHER JURISDICTION IN WHICH SUCH OFFER WOULD BE UNLAWFUL. THE DELIVERY
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OF THIS OFFERING MEMORANDUM AT ANY TIME DOES NOT IMPLY THAT INFORMATION
HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
THIS OFFERING MEMORANDUM IS INTENDED FOR USE SOLELY BY THE QIBS (UNDER
RULE 144A) OR NON-U.S. PERSONS (PURSUANT TO THE REQUIREMENTS OF REGULATION
S) TO WHOM THIS OFFERING MEMORANDUM IS DELIVERED FOR USE SOLELY IN
CONNECTION WITH AN OFFERING EXEMPT FROM REGISTRATION UNDER THE SECURITIES
ACT AND ANY APPLICABLE UNITED STATES STATE SECURITIES OR “BLUE SKY” LAWS,
AND MAY NOT BE REPRODUCED OR USED, IN WHOLE OR IN PART, FOR ANY OTHER
PURPOSE OR FURNISHED TO ANY OTHER PERSON.
EACH PROSPECTIVE INVESTOR (AND EACH EMPLOYEE, REPRESENTATIVE, OR OTHER
AGENT OF SUCH PROSPECTIVE INVESTOR) MAY DISCLOSE TO ANY AND ALL PERSONS,
WITHOUT LIMITATIONS OF ANY KIND THE TAX TREATMENT AND TAX STRUCTURE OF THE
TRANSACTION AND ALL MATERIALS OF ANY KIND (INCLUDING OPINIONS OR OTHER TAX
ANALYSES) THAT ARE PROVIDED TO THE PROSPECTIVE INVESTOR RELATING TO SUCH
TAX TREATMENT AND TAX STRUCTURE. ANY SUCH DISCLOSURE OF THE TAX
TREATMENT, TAX STRUCTURE AND OTHER TAX-RELATED MATERIALS SHALL NOT BE
MADE FOR THE PURPOSE OF OFFERING TO SELL THE NOTES OFFERED HEREBY OR
SOLICITING AN OFFER TO PURCHASE ANY SUCH NOTES. FOR PURPOSES OF THIS
PARAGRAPH, THE TERMS “TAX TREATMENT” AND “TAX STRUCTURE” HAVE THE
MEANING GIVEN TO SUCH TERMS UNDER TREASURY REGULATION SECTION 1.6011-4(c).
PROSPECTIVE INVESTORS ARE NOT TO CONSTRUE THE CONTENTS OF THIS OFFERING
MEMORANDUM OR ANY PRIOR OR SUBSEQUENT COMMUNICATIONS FROM THE
DEPOSITOR, THE SPONSOR, THE ADMINISTRATOR, THE CALCULATION AGENT, THE
ELIGIBLE LENDER TRUSTEE, THE INDENTURE TRUSTEE, THE DELAWARE TRUSTEE, THE
MASTER SERVICER, THE SUBSERVICER, THE INITIAL PURCHASERS OR ANY OF THEIR
OFFICERS, EMPLOYEES OR AGENTS AS INVESTMENT, LEGAL, ACCOUNTING,
REGULATORY OR TAX ADVICE. PRIOR TO PURCHASING ANY NOTES, A PROSPECTIVE
PURCHASER SHOULD CONSULT WITH ITS OWN LEGAL, BUSINESS, ACCOUNTING,
REGULATORY AND TAX ADVISERS TO DETERMINE THE APPROPRIATENESS AND
CONSEQUENCES OF AN INVESTMENT IN THE NOTES IN ITS SPECIFIC CIRCUMSTANCES
AND ARRIVE AT AN INDEPENDENT EVALUATION OF THE INVESTMENT BASED, AMONG
OTHER THINGS, ON ITS OWN VIEWS AS TO THE RISKS ASSOCIATED WITH THE TRUST
STUDENT LOANS, WHICH WILL AFFECT THE RETURN ON ITS INVESTMENT IN THE NOTES.
The depositor has taken all reasonable care to confirm that the information contained in this
offering memorandum is true and accurate in all material respects. In relation to the
depositor, the sponsor, the trust, the administrator, the master servicer, the trust student
loans and the notes, the depositor accepts full responsibility for the accuracy of the
information contained in this offering memorandum. Having made all reasonable inquiries,
the depositor confirms that, to the best of its knowledge, there have not been omitted material
facts the omission of which would make misleading any statements of fact or opinion
contained in this offering memorandum.
In connection with the proposed admission of the notes to the official list of the Irish Stock
Exchange and trading on its regulated market, the depositor accepts responsibility for the
information contained in this offering memorandum. To the best knowledge of the depositor,
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having taken all reasonable care to ensure that such is the case, the information contained in
this offering memorandum is in accordance with the facts and does not omit anything likely to
affect the import of such information.
IRS CIRCULAR 230 NOTICE
THIS OFFERING MEMORANDUM IS NOT INTENDED OR WRITTEN TO BE USED, AND CANNOT
BE USED, FOR THE PURPOSE OF AVOIDING U.S. FEDERAL, STATE OR LOCAL TAX
PENALTIES. THIS OFFERING MEMORANDUM HAS BEEN WRITTEN AND PROVIDED BY THE
DEPOSITOR IN CONNECTION WITH THE PROMOTION OR MARKETING BY THE DEPOSITOR
AND/OR THE INITIAL PURCHASERS OF THE TRANSACTIONS OR MATTERS ADDRESSED IN
THIS OFFERING MEMORANDUM. PROSPECTIVE INVESTORS SHOULD SEEK ADVICE BASED
ON THEIR PARTICULAR CIRCUMSTANCES FROM AN INDEPENDENT TAX ADVISOR.
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TABLE OF CONTENTS
Offering Memorandum
Page Page
Summary of Terms............................................1 May Be Shortfalls in Distributions to
Issuing Entity..............................................1 Noteholders.........................................17
Depositor....................................................1 Your Ability to Transfer the Notes May
Sponsor, Master Servicer and Be Limited...........................................17
Administrator........................................1 Current Illiquid Market Conditions May
Subservicer.................................................2 Continue in the Future........................18
Calculation Agent........................................2 The Characteristics of the Statistical
Indenture Trustee, Paying Agent and Trust Student Loans as of the
Eligible Lender Trustee........................2 Statistical Cutoff Date May Differ
Delaware Trustee.......................................2 From the Pool of Trust Student
The Notes...................................................2 Loans Sold to the Issuing Entity on
Dates..........................................................2 the Closing Date.................................18
Information About the Notes.......................3 Your Notes Will Have Basis Risk, Which
Information About the Trust........................4 Could Compromise the Trust’s
Formation of the Trust..........................4 Ability to Pay Principal and Interest
Trust Assets.........................................5 on Your Notes.....................................19
Administration of the Trust..........................8 You May Incur Losses or Delays in
Distributions.........................................8 Payments on Your Notes if
Transfer of the Assets to the Trust.....10 Borrowers Default on the Trust
Servicing of the Assets.......................10 Student Loans.....................................20
Compensation of the Master If a Guarantor of the Trust Student
Servicer........................................11 Loans Experiences Financial
Termination of the Trust...........................11 Deterioration or Failure, You May
Optional Purchase..............................12 Suffer Delays in Payment or Losses
Residual Certificateholder........................12 on Your Notes.....................................20
Tax Considerations...................................13 The U.S. Department of Education’s
ERISA Considerations..............................13 Failure to Make Reinsurance
Ratings of the Notes.................................13 Payments May Negatively Affect the
Listing Information....................................14 Timely Payment of Principal and
Risk Factors..............................................14 Interest on Your Notes........................21
Identification Numbers..............................14 Payment Offsets by FFELP Loan
Risk Factors....................................................15 Guarantors or the U.S. Department
Because the Notes May Not Provide of Education Could Prevent the
Regular or Predictable Payments, Trust from Paying You the Full
You May Not Receive the Return on Amount of the Principal and Interest
Your Investment That You Expected.15 Due on Your Notes.............................22
The Notes Are Not Suitable Investments You May Be Unable to Reinvest
for All Investors..................................15 Principal Payments at the Yield You
You Will Bear Prepayment and Earn on the Notes...............................23
Extension Risk Due to Actions A Failure to Comply with Student Loan
Taken by Individual Borrowers and Origination and Servicing
Other Variables Beyond Our Control.15 Procedures Could Jeopardize
The Trust Will Have Limited Assets Guarantor, Interest Subsidy and
From Which to Make Payments on Special Allowance Payments on the
the Notes, Which May Result in Trust Student Loans, Which May
Losses................................................16 Result in Delays in Payment or
Certain Credit and Liquidity Losses on Your Notes........................24
Enhancement Features Are Limited The Inability of the Depositor or the
and if They Are Depleted, There Master Servicer to Meet Its
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Repurchase Obligation May Result Consumer Protection Laws May Affect
in Losses on Your Notes....................24 Enforceability of the Trust Student
BANA’s Suspension of Origination of Loans..................................................33
New FFELP Loans and BANA’s The Trust May Be Affected by Delayed
Subsequent Inability to Meet its Payments From Borrowers Called to
Substitution Obligation May Cause Active Military Service.........................34
You to Bear Prepayment Risk............25 Defined Terms.................................................35
The Notes May Be Repaid Early Due to Formation of the Trust.....................................35
an Exercise of the Purchase Option. The Trust...................................................35
If This Happens, Your Yield May Be Capitalization of the Trust..........................36
Affected and You Will Bear Eligible Lender Trustee and Interim
Reinvestment Risk.............................25 Eligible Lender Trustee.......................37
FDIC Receivership or Conservatorship Indenture Trustee and Paying Agent........38
of BANA Could Result in Delays in Delaware Trustee......................................39
Payments or Losses on Your Notes..26 The Depositor..................................................39
A Master Servicer or Subservicer The Seller, Sponsor, Master Servicer and
Default May Result in Additional Administrator.............................................40
Costs, Increased Servicing Fees by General......................................................40
a Substitute Master Servicer or a BANA’s Student Loan Financing
Diminution in Servicing Business.............................................41
Performance, Any of Which May General...............................................41
Have an Adverse Effect on Your Loan Originations................................41
Notes..................................................28 Origination Process............................43
The Bankruptcy of the Subservicer Servicing.............................................43
Could Delay the Appointment of a Consolidation/Repayment Programs..43
Successor Subservicer or Reduce Default Management..........................44
Payments on Your Notes...................29 Incentive Programs.............................44
Timely Payments on Your Notes Use of Proceeds..............................................45
Depend in Part on the Servicing The Trust Student Loan Pool...........................46
Ability of the Subservicer....................29 General......................................................46
The Trust’s Inclusion of Subserviced Eligible Trust Student Loans.....................46
Trust Student Loans May Make It FFELP Delinquencies, Defaults, Claims
More Difficult to Find a Successor and Net Losses...................................47
Master Servicer..................................30 Characteristics of the Statistical Trust
The Indenture Trustee May Have Student Loans.....................................49
Difficulty Liquidating Trust Student Insurance of Trust Student Loans;
Loans After an Event of Default.........30 Guarantors of Trust Student Loans....50
The Enactment of the Health Care and Cure Period for Trust Student Loans........51
Education Reconciliation Act of Consolidation of Federal Benefit Billings
2010 and Any Other Changes in and Receipts and Guarantor Claims
Law May Adversely Affect the Trust with Other Trusts................................52
Student Loans, the Guarantors, the Third-Party Originators of FFELP Loans...53
Depositor and BANA and, Termination of the Trust............................53
Accordingly, Adversely Affect Your Transfer and Servicing Agreements................54
Notes..................................................30 General......................................................54
The Use of Master Promissory Notes Purchase of Student Loans by the
May Compromise the Indenture Depositor; Representations and
Trustee’s Security Interest in the Warranties of the Seller......................54
Trust Student Loans...........................31 Sale of Student Loans to the Trust;
Certain Actions Can Be Taken Without Representations and Warranties of
Noteholder Approval..........................32 the Depositor.......................................55
Limitations of Ratings; Withdrawal or Custodian of Promissory Notes.................56
Downgrade of Initial Ratings May Amendments to Transfer and Servicing
Decrease the Prices of Your Notes; Agreements.........................................56
Unsolicited Ratings............................33 Servicing and Administration...........................56
General......................................................56
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The Master Servicing Agreement and Prepayments, Extensions, Weighted
the Subservicing Agreement..............57 Average Lives and Expected Maturities
Servicing Procedures...............................58 of the Notes...............................................97
Payments on Trust Student Loans...........60 Certain Legal Aspects of the Trust Student
Master Servicer Covenants......................60 Loans.........................................................98
Servicing Compensation...........................62 Transfer of Trust Student Loans...............98
Evidence as to Compliance......................62 Consumer Protection Laws.....................100
Matters Regarding the Master Servicer....62 Loan Origination and Servicing
Servicer Default........................................63 Procedures Applicable to Trust
Rights Upon Master Servicer Default.......64 Student Loans...................................100
Waiver of Past Defaults............................64 Certain Matters Relating to Bankruptcy..101
Custody of the Student Loan Promissory Student Loans Generally Not Subject to
Notes..................................................65 Discharge in Bankruptcy...................103
Description of Subservicer........................65 U.S. Federal Income Tax Consequences......103
The Administration Agreement and the Tax Characterization of the Trust............105
Calculation Agent Agreement............65 Tax Consequences to Holders of Notes
Administrator Default................................67 in General.........................................105
Rights Upon Administrator Default...........67 State Tax Consequences..............................110
Statements to Indenture Trustee and ERISA Considerations...................................110
Trust...................................................68 Accounting Considerations............................113
Evidence as to Compliance......................69 Reports to Noteholders..................................113
Description of Calculation Agent..............69 Notice to Canadian Residents.......................114
Description of the Notes..................................70 Resale Restrictions.................................114
The Indenture...........................................70 Representations of Purchasers...............114
Insolvency Events.....................................74 Rights of Action—Ontario Purchasers
Form and Denomination of the Notes......75 Only...................................................115
Book-Entry Registration.....................75 Enforcement of Legal Rights...................115
Exchanges Between Regulation S Taxation and Eligibility for Investment.....115
Global Notes and Rule 144A Notice to Investors.........................................115
Global Notes................................79 Listing Information..........................................116
Definitive Notes..................................80 Plan of Distribution.........................................118
The Notes.................................................81 Ratings of the Notes......................................118
Pool Factors..............................................82 Legal Matters.................................................119
Notice of Interest Rate..............................82 Glossary For Offering Memorandum.............120
Determination of Indices...........................82
Trust Accounts and Eligible Investments.84 Annex A: Characteristics of the Statistical
Distributions..............................................85 Trust Student Loan Pool..........................A-1
Priority of Payments Following Certain
Events of Default Under the Annex B: Prepayments, Extensions,
Indenture............................................87 Weighted Average Lives and Expected
Voting Rights and Remedies....................88 Maturities of the Notes............................B-1
Capitalized Interest Account.....................88
Credit Enhancement.................................88 Annex C: Federal Family Education Loan
Administration Fees..................................89 Program...................................................C-1
Servicing Compensation...........................90
Trust Fees.................................................90 Annex D: Global Clearance, Settlement and
Transfer Restrictions................................91 Tax Documentation Procedures..............D-1
Optional Purchase....................................96
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Application has been made to the Irish Stock Exchange for the notes to be
admitted to the official list and trading on its regulated market. We cannot assure you
that the application will be granted. This offering memorandum may be used only for
the purposes for which it has been published.
The information in this offering memorandum, if conveyed prior to the time of
your commitment to purchase any notes, supersedes in its entirety any information
contained in any prior disclosure or statistical information relating to the notes that you
may have received. You should rely only on the information in this offering
memorandum in making your investment decision.
FORWARD-LOOKING STATEMENTS
Certain statements contained in or incorporated by reference in this offering
memorandum consist of forward-looking statements relating to future economic
performance or projections and other financial items. These statements can be
identified by the use of forward-looking words such as “may,” “will,” “should,” “expects,”
“believes,” “anticipates,” “estimates,” or other comparable words. Forward-looking
statements are subject to a variety of risks and uncertainties that could cause actual
results to differ from the projected results. Those risks and uncertainties include,
among others, general economic and business conditions, regulatory initiatives and
compliance with governmental regulations, customer preferences and various other
matters, many of which are beyond our control. Because we cannot predict the future,
what actually happens may be very different from what is contained in our forward-
looking statements.
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