--Amelia Granger
The underlying collateral of the NextStudent Master Trust I will be auctioned Wednesday and it will be the first liquidation of its type (TS, 7/8). Losses to senior noteholders are expected to run as high as 7% from the liquidation, while subordinate noteholders will likely receive no money at all from the sale, according to Moody’s Investors Service.
The deal originally suffered rating downgrades due to its exposure to failed auction rate securities. Moody’s is now downgrading the eight A tranches of 2006 notes from B3 to Caaa1, with the deal’s lone B tranche slipping from Ca to C. Similarly, 15 A tranches of 2007 notes have dropped from B3 to Caaa1, with the B tranche being downgraded from Ca to C. The actions stem from issuer....