OREANDA-NEWS. S&P Global Ratings today placed its 'AA (sf)' ratings on eight student loan revenue bonds issued by South Carolina State Education Assistance Authority's (the Authority's) series 2009-1 on CreditWatch with negative implications. At the same time, we raised our rating on one bond to 'AAA (sf)' (see list).

The transaction is backed by a collateral pool comprising both private student loans and Federal Family Education Loan Program (FFELP) student loans. As of June 2016, the pool comprised approximately 59% of private student loans and 41% of FFELP loans.

The CreditWatch placements reflect our view of the higher-than-expected cumulative default levels on the private student loan pool and declining parity percentages that might not be sufficient to support the bonds at their current ratings.

The upgrade on the bond maturing Oct. 1, 2016, to 'AAA (sf)' from 'AA (sf)' reflects its near-term expected payoff with funds that have been set aside in the trust accounts for bond redemptions. The rating also reflects the transaction's structural features, which restrict the use of those funds for other purposes.

KEY STRUCTURAL FEATURESThe transaction initially allowed excess revenue to be released before Nov. 1, 2019, if the transaction parity ratio is at l20% or higher. In October 2013, the Authority relinquished its right (by executing a cash flow certificate, the trustee was directed to not release cash to it) to receive cash releases when the 120% parity threshold is met.

CURRENT CAPITAL STRUCTURE(i)The series 2009-1 bonds were issued as tax-exempt, fixed-rate bonds with interest payable semiannually on each April 1 and Oct. 1. The bonds are subject to various redemption provisions before their respective stated maturity dates. The trust has been redeeming the bonds with excess revenue.