EXECUTION COPY INVITATION TO OFFER BONDS made by the CONNECTICUT STUDENT LOAN FOUNDATION The Foundation invites its Bondowners to offer to sell to the Foundation for cash the AUCTION RATE BONDS of the Foundation listed on Appendix A hereto. THIS INVITATION WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME ON THE EXPIRATION DATE OF SEPTEMBER 18, 2012, UNLESS CHANGED. To make an informed decision as to whether, and how, to offer its Bonds, a Bondowner must read this Invitation To Offer Bonds carefully and consult its broker-dealer or other financial advisor. The Dissemination Agent, Paying Agent and Tender Agent for this Invitation is: THE BANK OF NEW YORK MELLON TRUST COMPANY N.A., as Trustee for CONNECTICUT STUDENT LOAN FOUNDATION The Dealer Manager for this Invitation is: SAMUEL A. RAMIREZ & CO, INC. Institutional Bondowners with questions about this Invitation should contact the Dealer Manager at the address and phone number set forth below: Samuel A. Ramirez & Co., Inc. Auction Trading Desk 61 Broadway, Suite 2924 New York, New York Attention: Sean White (212) 378-7122 Sean.white@ramirezco.com Other Bondowners with questions about this Invitation should contact the financial institution that maintains the account in which their Bonds are held.
Key Dates All of these dates are subject to change Notices of changes will be sent in the manner provided for in this Invitation: Expiration Date deadline for receipt of Offer... September 18, 2012 Notification of accepted and rejected Offers... September 20, 2012 Release of all Offered Bonds which have not been accepted for purchase... September 21, 2012 Settlement Date payment made on all accepted Bonds... September 21, 2012 Invitation date - August 13, 2012
TABLE OF CONTENTS Page QUESTIONS AND ANSWERS... 1 1. Introduction... 6 2. Source of Funds to Purchase Bonds... 11 3. Certain Potential Adverse Effects of Invitation on Owners of Bonds... 11 4. Expiration Date... 12 5. Information About Invitation... 12 6. How Offers Can Be Made... 13 7. Accrued Interest... 13 8. Provisions Applicable to all Offers... 13 9. Procedures For Offering Bonds Held through Brokers and Banks... 14 10. ATOP Account... 15 11. Determinations as to Form and Validity of Offers; Right of Waiver and Rejection... 15 12. Amendments and Withdrawals of Offers... 16 13. Irrevocability of Offers... 16 14. Determination of Amounts to be Purchased... 16 15. Determination of Purchase Prices... 16 16. Acceptance of Offers Constitutes Irrevocable Agreement; Notice of Results... 18 17. Settlement Date; Settlement Procedures... 18 18. Purchase Funds... 18 19. Conditions to Purchase... 18 20. Extension of Offer Submission Period; Termination and Amendment of Invitation; Changes to Terms... 19 21. Certain Federal Income Tax Consequences... 19 22. Waiver and Indemnity... 20 23. Fees and Expenses of the Dealer Manager, Dissemination Agent, Paying Agent and Tender Agent... 20 24. Miscellaneous... 20 APPENDIX A CONNECTICUT STUDENT LOAN FOUNDATION OUTSTANDING STUDENT LOAN REVENUE BONDS AS OF AUGUST 13, 2012... A-1 i
No one has been authorized by any of the Foundation, the Broker-Dealer, the Dealer Manager, the Trustee or the Dissemination Agent to recommend to any Bondowners whether to offer Bonds pursuant to this Invitation, at what price or prices any offer should be made. No one has been authorized to give any information or to make any representation in connection with this Invitation other than those contained in this Invitation or included therein by specific reference. Any recommendation, information and representations given or made cannot be relied upon as having been authorized by the Foundation, the Broker-Dealer, the Dealer Manager, the Trustee or the Dissemination Agent. The Foundation, the Broker-Dealer, the Dealer Manager, the Trustee and the Dissemination Agent do not recommend to any Bondowner whether to offer Bonds, at what price or prices an offer should be made. Each Bondowner must make these decisions and should read this Invitation and consult with its broker-dealer or other financial advisor in making these decisions. This Invitation has not been approved or disapproved by the Securities and Exchange Commission or any state securities commission nor has the Securities and Exchange Commission or any state securities commission passed upon the fairness or merits of this Invitation or upon the accuracy or adequacy of the information contained in this Invitation. This Invitation is not being made to, and offers will not be accepted from or on behalf of, bondowners in any jurisdiction in which this Invitation or the acceptance of offers pursuant thereto would not be in compliance with the laws of such jurisdiction. No dealer, salesperson or other person has been authorized to give any information or to make any representation not contained in this Invitation and, if given or made, such information or representation may not be relied upon as having been authorized by the Foundation. The delivery of this Invitation shall not under any circumstances create any implication that the information contained herein or in any document referenced herein is correct as of any time subsequent to the date hereof or thereof or that there has been no change in the information set forth herein or therein since such respective dates or in the affairs of the Foundation since the date hereof. This Invitation and the documents referenced herein may contain statements relating to future results that are forward looking statements. When used in this Invitation or any documents referenced herein, the words estimate, anticipate, forecast, project, intend, propose, plan, expect and similar expressions identify forward looking statements. Such forward looking statements are subject to risks and uncertainties. Some assumptions used in connection with the forward looking statements will not be realized and unanticipated events and circumstances may occur. Therefore, there are likely to be differences between such statements and actual results, and those differences may be material. Forward looking statements speak only as of the date of the document in which they are made. We disclaim any obligation or undertaking to provide any updates or revisions to any forward looking statement to reflect any change in our expectations or any change in events, conditions or circumstances on which the forward looking statement is based. ii
INVITATION TO OFFER BONDS MADE BY THE CONNECTICUT STUDENT LOAN FOUNDATION to Bondowners to offer to sell for cash the Bonds listed on Appendix A hereto. (dated August 13, 2012) QUESTIONS AND ANSWERS PLEASE NOTE THAT THESE QUESTIONS AND ANSWERS ARE PROVIDED TO YOU FOR PURPOSES OF CONVENIENT REFERENCE ONLY, AND ARE SUBJECT IN ALL RESPECTS TO THE DEFINITIVE STATEMENTS OF THE MATTERS ADDRESSED THAT FOLLOW THESE QUESTIONS AND ANSWERS IN THIS INVITATION. BONDOWNERS ARE ADVISED TO READ THIS INVITATION IN ITS ENTIRETY BEFORE MAKING ANY DECISION WITH RESPECT TO THIS INVITATION. NO PERSON IS AUTHORIZED TO DETACH AND DELIVER THESE QUESTIONS AND ANSWERS TO A BONDOWNER WITHOUT THE FULL TEXT OF THIS INVITATION AND NO BONDOWNER RECEIVING THESE QUESTIONS AND ANSWERS WITHOUT THE FULL TEXT OF THIS INVITATION IS AUTHORIZED TO RELY THEREON. IN THE EVENT OF ANY INCONSISTENCY OR DISCREPANCY BETWEEN THESE QUESTIONS AND ANSWERS AND THE STATEMENTS THAT FOLLOW IN THIS INVITATION, SUCH FOLLOWING STATEMENTS SHALL CONTROL. CERTAIN CAPITALIZED TERMS USED BUT NOT DEFINED IN THESE QUESTIONS AND ANSWERS ARE USED AS DEFINED IN SUCH FOLLOWING STATEMENTS. Q1. WHY DO YOU WANT TO PURCHASE MY AUCTION RATE BONDS? The Connecticut Student Loan Foundation issued a total of $935,900,000 of its Student Loan Revenue Bonds during the period from 2004 through 2007 for the primary purpose of financing or refinancing student loans originated under the Federal Family Education Loan Program ( FFELP or the FFEL Program ). These Bonds are secured by a single Trust Estate consisting primarily of FFELP loans. All of these Bonds were issued as bonds bearing interest at a variable rate that was expected to be periodically determined through an auction process. No successful auction of these Bonds has occurred, however, since February 2008. As a result, all of these Bonds have instead borne interest during this period at the applicable index-based rates provided by the applicable supplemental indenture authorizing their issuance. In addition, federal law changes during this period have terminated new lending under the FFEL Program. We wish to apply currently available accumulated receipts upon student loans held in the Trust Estate, in excess of interest and administrative cost requirements, to reduce the principal amount of these Bonds that remain outstanding in a manner that will improve the ability of the Trust Estate to secure the Bonds that will remain outstanding. To date, we have reduced the aggregate outstanding amount of the Bonds by $377,750,000 through secondary market purchases, including purchases resulting from prior invitations to offer bonds as well as other purchases. See 1. Introduction. Q2. WHAT PRINCIPAL AMOUNT OF AUCTION RATE BONDS DO YOU WANT TO PURCHASE? Pursuant to the terms and conditions set forth in this Invitation and the procedures described herein, we currently intend to use up to $40,000,000 from available funds to purchase Bonds if the submitted Offer Prices for such Bonds are acceptable, as described herein. We reserve the right, in our sole and absolute discretion, to use additional available funds from any source to purchase Bonds. The 1
amount of funds to be used for purchase and the selection of the actual Bonds to be purchased shall be determined in our sole and absolute discretion, subject to the auction procedures described in this Invitation. See Q6. HOW IS THE AUCTION PROCEDURE USED TO DETERMINE WHICH OFFERED BONDS WILL BE PURCHASED? and 14. Determination of Amounts to be Purchased. Q3. WHAT PRICE WILL I RECEIVE FOR OFFERING MY BONDS? If your Bonds are accepted for purchase by us pursuant to the terms and conditions set forth, and the procedures described, in this Invitation, you will receive cash on the Settlement Date in the amount of a Purchase Price that is generally equivalent to the sum of the Offer Price that you submitted for the Bonds to be purchased, plus accrued and unpaid interest thereon to, but not including, the Settlement Date. See Q6. HOW IS THE AUCTION PROCEDURE USED TO DETERMINE WHICH OFFERED BONDS WILL BE PURCHASED? 1. Introduction and 15. Determination of Purchase Prices. Q4. WHAT IS YOUR SOURCE OF FUNDS FOR PURCHASING OFFERED BONDS? We currently expect to fund all payments of the Purchase Price of Bonds that are accepted for purchase from amounts that are currently available, or that are currently expected to become available prior to the Settlement Date, for this purpose under the Indenture. See 2. Sources of Funds to Purchase Bonds. Q5. WHAT HAPPENS IF I DON T OFFER MY BONDS? You would remain the owner of your Bonds and would continue to bear the financial risks associated with the Bonds. We reserve the rights, from time to time in the future: (i) to purchase additional amounts of Bonds pursuant to separate invitations to offer Bonds or through one or more negotiated transactions, including purchases that may be for prices higher than the final Purchase Prices that are applicable to purchases of Offered Bonds pursuant to this Invitation; and (ii) to redeem Bonds at a redemption price of the principal amount of Bonds to be redeemed plus accrued and unpaid interest. See 3. Certain Potential Adverse Effects of Invitation on Owners of Bonds. Bondowners should consult their own financial advisors for information concerning such financial risks and recent market valuations of auction rate bonds that are similar to their Bonds and for financial advice concerning their response to this Invitation. Q6. HOW IS THE AUCTION PROCEDURE USED TO DETERMINE WHICH OFFERED BONDS WILL BE PURCHASED? We may purchase some, all or none of the Offered Bonds and will use an auction procedure as described in this Invitation to determine which, if any, Offered Bonds are purchased. We will separately consider for purchase: (i) all Offered Bonds that are Student Loan Revenue Bonds, Senior Series 2004A-1, Senior Series 2004A-3, Senior Series 2004A-4, Senior Series 2004A-5, Senior Series 2004A-6, Senior Series 2004A-7, Senior Series 2006A-1, Senior Series 2006A-2, Senior Series 2007A-1 and Senior Series 2007A-3 (collectively, the Senior Bonds ); and (ii) all Offered Bonds that are Student Loan Revenue Bonds, Subordinate Series 2004B and Subordinate Series 2006B (collectively, the Subordinate Bonds ). Only Offers that are received in compliance with the requirements of this Invitation are expected to be considered, but we reserve the right, in our sole and absolute discretion, to waive immaterial non-compliance; provided that Bonds will only be purchased in the applicable Authorized 2
Denomination for such Bonds. All Bonds purchased pursuant to this Invitation will be cancelled pursuant to the Indenture. We currently expect to apply an aggregate amount of up to $40,000,000 to the purchase of Offered Bonds that are Senior Bonds (the Senior Tender Ceiling ) at Offer Prices that do not exceed $985 per $1,000 (the Senior Offer Price Ceiling ), but reserve the right to increase one or both of the Senior Tender Ceiling and the Senior Offer Price Ceiling in our sole and absolute discretion. In the event that the aggregate of the Purchase Prices of Offered Bonds that are Senior Bonds with Offer Prices that are less than the Senior Offer Price Ceiling exceeds the Senior Tender Ceiling, such Offered Bonds will be selected for purchase in order of increasing Offer Price, beginning with the lowest Offer Price received with respect to an otherwise qualified Offer. We may also purchase Offered Bonds that are Subordinate Bonds, in our sole and absolute discretion, subject to the selection procedures described in this paragraph. No Subordinate Bonds will be selected for purchase unless all Subordinate Bonds for which qualified Offers have been submitted at lower Offer Prices have been selected. We reserve the rights: (i) to purchase Offered Bonds that are Senior Bonds, including, in our discretion, Offered Bonds that are Senior Bonds with Offer Prices above the Senior Offer Price Ceiling, without also purchasing Offered Bonds that are Subordinate Bonds; and (ii) to purchase Offered Bonds that are Subordinate Bonds without also purchasing Offered Bonds that are Senior Bonds with Offer Prices above the Senior Offer Price Ceiling. See 8. Provisions Applicable to all Offers, 14. Determination of Amounts to be Purchased and 15. Determination of Purchase Prices. Q7. IS THE FOUNDATION REQUIRED TO ACCEPT OFFERS FOR BONDS? Yes, with respect to Offered Bonds that are Senior Bonds, but only if the Offer conforms to the requirements of this Invitation, if the Offer Price does not exceed the Senior Offer Price Ceiling and if the aggregate Purchase Price of all Offered Bonds that are Senior Bonds that would otherwise qualify for purchase under this Invitation does not exceed the Senior Tender Ceiling. We are not required to accept any Offers for Subordinate Bonds. See 1. Introduction. Q8. WHEN WILL THIS INVITATION EXPIRE? The scheduled Expiration Date for this Invitation is 5:00 p.m. (Eastern Time), on September 18, 2012, unless earlier terminated or extended by us in our sole and absolute discretion. Any termination or extension of this Invitation will be publicly announced by us by making a release to EMMA and The Depository Trust Company ( DTC ). See 20. Extension of Offer Submission Period; Termination and Amendment of Invitation; Changes of Terms. Q9. WILL I PAY ANY FEES OR COMMISSIONS WHEN I OFFER MY BONDS? You will not pay any fees to us, the Dealer Manager or the Dissemination Agent; however, if your Bonds are held by a broker, dealer, bank or trust company, they may charge you a fee for their services. You should contact them to determine whether they will charge you for processing your offer. See 23. Fees and Expenses of the Dealer Manager, Dissemination Agent, Paying Agent and Tender Agent. 3
Q10. HOW DO I OFFER MY BONDS? All owners of Bonds who are not participants in DTC can only make Offers to sell their Bonds through the financial institution which maintains the account in which their Bonds are held. If you own Bonds that are held for you by a broker, dealer, bank, trust company or other institution, you will need to instruct your account executive to offer your Bonds pursuant to this Invitation. Your instructions should be given well in advance of the Expiration Date to provide your financial institution with sufficient time to transmit your Offer to us. See 6. How Offers Can Be Made. Q11. DO I HAVE TO SPECIFY AN OFFER PRICE FOR THE BONDS WHEN I OFFER THEM? Yes. See 6. How Offers Can Be Made. Q12. MAY I SPECIFY AN OFFER PRICE THAT EXCEEDS THE SENIOR OFFER PRICE CEILING? Yes, but we are not required to accept an Offer that specifies an Offer Price that exceeds the Senior Offer Price Ceiling. See 6. How Offers Can Be Made. Q13. WILL ALL OWNERS OF BONDS RECEIVE THE SAME PURCHASE PRICE? No. Each accepted Offer will result in a Purchase Price based upon the submitted Offer Price for that Offer; however, as separately applied to Senior Bonds and Subordinate Bonds, Offered Bonds will be purchased prior to the purchase of any similar Offered Bonds that were Offered at a higher Offer Price, subject to the limitations described above. See 15. Determination of Purchase Prices. Q14. MAY I WITHDRAW MY OFFER? Yes. You may withdraw your Offer at any time before 5:00 p.m. (Eastern Time) on the Expiration Date. Offers become irrevocable at 5:00 p.m. (Eastern Time) on the Expiration Date and may not be withdrawn unless we extend the Expiration Date and do not announce a maximum Purchase Price for such Bonds, in which case all Bonds may be withdrawn at any time prior to the new Expiration Date. See 12. Amendments and Withdrawals of Offers. Q15. IF I WITHDRAW AN OFFER, MAY I REOFFER MY BONDS? Yes. Properly withdrawn Bonds can be reoffered at any time on or prior to 5:00 p.m. (Eastern Time) on the Expiration Date. See 12. Amendments and Withdrawals of Offers. Q16. WHAT WILL BE THE FEDERAL INCOME TAX CONSEQUENCES TO ME OF SELLING MY BONDS? You should consult with your own tax advisor to determine the particular tax consequences of selling your Bonds. Q17. MAY I OFFER SOME OF MY BONDS BUT NOT ALL OF THEM? Yes. Please note that in any event you may only Offer Bonds in an applicable Authorized Denomination for such Bonds, as set forth in Appendix A hereto. See 6. How Offers Can Be Made. 4
Q18. WHEN IS THE EXPECTED SETTLEMENT DATE? The Settlement Date is expected to occur on or about September 21, 2012, unless this Invitation is earlier terminated or extended. See 20. Extension of Offer Submission Period; Termination and Amendment of Invitation; Changes to Terms. Q19. IS OFFERING MY BONDS A GOOD IDEA AND WHAT OFFER PRICE SHOULD I SUBMIT? We cannot and do not advise you as to whether or not Offering your Bonds is a good idea for you or as to what Offer Price you should submit. Your broker, account executive or financial advisor is probably the best person to advise you with respect to these questions. You should, therefore, consult with your own experts. See 1. Introduction and 3. Certain Potential Adverse Effects of Invitation on Owners of Bonds. Q20. WHAT WILL MY BROKERAGE FIRM OR BANK DO TO ACCOMPLISH THE SETTLEMENT OF MY TENDER? Brokerage firms and banks keep the Bonds in book-entry only form at DTC. Subject to satisfaction of all conditions to our obligation to purchase Offered Bonds, as described in this Invitation, we will cause payment for such Offered Bonds to be made on the Settlement Date in immediately available funds by deposit with DTC of the aggregate Purchase Price of the Offered Bonds accepted for purchase. It is expected that, in accordance with DTC s standard procedures, on the Settlement Date, the account of your broker or bank at DTC will be credited with the amount of the Purchase Price for your accepted Offered Bonds, and your broker or bank will transmit the funds to you in accordance with their standard procedures. None of the Foundation, the Broker-Dealer, the Dealer Manager, the Trustee or the Dissemination Agent has any responsibility or liability for the distribution of the Purchase Price to you by DTC, your broker or your bank, or for when such distribution is made. See 6. How Offers Can Be Made, 7. Accrued Interest and 9. Procedures For Offering Bonds Held through Brokers and Banks. Q21. WHOM SHOULD I CALL IF I HAVE FURTHER QUESTIONS OR NEED ADDITIONAL COPIES OF DOCUMENTS? Questions or requests for assistance from institutional investors in connection with this Invitation may be directed to the Dealer Manager, Samuel A. Ramirez & Co., Inc., at the addresses and phone numbers set forth on the front cover of this Invitation. Other Bondholders with questions should contact the financial institution that maintains the account in which their Bonds are held or another financial advisor. 5
1. Introduction General. This Invitation to Offer Bonds (the Invitation ) is made by the Connecticut Student Loan Foundation (the Foundation ) to the owners (the Bondowners ) of the Foundation s auction rate bonds (collectively, the Bonds ) listed on Appendix A to this document. Each Bondowner is invited by the Foundation to offer to sell to the Foundation for cash all or any part of its Bonds (an Offer and Offered Bonds ), subject to the terms and conditions set forth in this Invitation at an offer price specified by the Bondowner (an Offer Price ), subject to acceptance by the Foundation as described herein. See 14. Determination of Amounts to be Purchased and 15. Determination of Purchase Prices. The Foundation has no present intention of purchasing Bonds (which may include any or all of its Senior Bonds and Subordinate Bonds) in the secondary market at cash prices equal to, or greater than, par, but reserves the right to do so in the future. The Foundation reserves the rights, from time to time, to purchase Bonds in the secondary market at any price by methods that may include, without limitation, the distribution of separate invitations to tender, bidding upon Bonds that may be offered in any manner and negotiation with individual Bondowners, to redeem Bonds at par in accordance with their terms and to fund such purchase or redemption from any source available to the Foundation. See 3. Certain Potential Adverse Effects of Invitation on Owners of Bonds. As more fully described herein, the Expiration Date is September 18, 2012 (subject to change as described herein). The Bonds the Foundation decides to purchase will be paid for by 2:00 p.m. on September 21, 2012 (the Settlement Date ). Accrued and unpaid interest on the purchased Bonds to but not including the Settlement Date (the Accrued Interest ) will also be paid on the Settlement Date. The Dissemination Agent, Paying Agent and Tender Agent for this Invitation is The Bank of New York Mellon Trust Company, N.A. (in such capacities, the Dissemination Agent ). The Dealer Manager for this Invitation is Samuel A. Ramirez & Co., Inc. (in such capacity, the Dealer Manager ). Institutional Bondowners with questions about this Invitation should contact the Dealer Manager as set forth on the cover of this Invitation. Other Bondowners with questions should contact the financial institution which maintains the account in which their Bonds are held. All times in this Invitation are New York City Time. Availability of Certain Information. In accordance with the provisions of Rule 15c2-12, as amended ( Rule 15c2-12 ), promulgated by the United States Securities and Exchange Commission (the SEC ) pursuant to the Securities Exchange Act of 1934, as amended, on March 31, 2009, the Foundation filed with Bloomberg Municipal Repository, DPC Data Inc., Interactive Data Pricing and Reference Data, Inc., and Standard & Poor s Securities Evaluations, Inc. (such repositories being all of the Nationally Recognized Municipal Securities Information Repositories ( NRMSIRs ) that were then approved by the SEC pursuant to Rule 15c2-12 as of such date) a preliminary annual notice with respect to the period ending September 30, 2008 (the 2008 Annual Notice ). The 2008 Annual Notice sets forth certain information with respect to the Foundation and to the Bonds including, among other things, the Foundation s unaudited financial statements for the fiscal year ended September 30, 2008, and certain student loan portfolio information. On June 1, 2009, the Foundation filed with each such NRMSIR a document entitled Other Secondary Market Information (the June 1, 2009 Statement ) that disclosed the adoption of a resolution by the Foundation s Board of Directors on May 26, 2009 (the May 26, 2009 Resolution ). The May 26, 6
2009 Resolution authorized the Foundation s staff to prepare measures for reducing the principal amount of Bonds outstanding, including through the purchasing of Bonds by the Foundation in the secondary market. Subsequent to the filing of the 2008 Annual Notice and the June 1, 2009 Statement, the Municipal Securities Rulemaking Board ( MSRB ) has implemented its Electronic Municipal Market Access System ( EMMA ) and the recognition of each of the private repositories with which such filings were made as NRMSIRs has been revoked by the SEC. The Foundation has caused copies of each of the 2008 Annual Notice, the June 1, 2009 Statement and certain other filings that it previously caused to be made with NRMSIRs to be filed with EMMA. On August 26, 2009, the Foundation filed with EMMA a material event notice consisting of a document entitled Notice of Failure to Comply with Financial Reporting Requirement (the August 26, 2009 Statement ). The August 26, 2009 Statement disclosed that, on August 7, 2009, the Foundation received a notice from The Bank of New York Mellon Trust Company, N.A., in its capacity as trustee for the Bonds (the Trustee and the August 7, 2009 Trustee Notice ) under the Indenture of Trust dated as of October 1, 2004 between the Foundation and the Trustee (as supplemented, the Indenture ). The August 7, 2009 Trustee Notice stated that the Foundation had failed to file an annual report as to the Foundation s operations and activities during the fiscal year ending September 30, 2008 and certified audited financial statements of the Foundation for such fiscal year by March 29, 2009, as required by Section 6.7(b) of the Indenture. The August 7, 2009 Trustee Notice demanded that the Foundation comply with such requirement. Section 9.1(3) of the Indenture provides that, if the Foundation shall fail to comply with the provisions of the Indenture and such failure shall continue for a period of ninety (90) days after written notice thereof by the Trustee, such event shall constitute an Event of Default for purposes of the Indenture, unless the Foundation is taking steps to cure the event and the event is curable within a reasonable period of time. The Foundation subsequently complied with the requirements of the Indenture described in the August 7, 2009 Trustee Notice. Copies of the Indenture are available to Bondholders upon request to the Foundation. On September 1, 2009, the Foundation filed with EMMA a material event notice consisting of a document entitled Notice of Broker-Dealer Agreement Termination and Substitution (the September 1, 2009 Statement ). The September 1, 2009 Statement disclosed that Samuel A. Ramirez & Co, Inc. replaced UBS Securities LLC as broker-dealer for the auction rate remarketing of the Student Loan Revenue Bonds, Series 2007A-1, 2007B, 2007A-3 and 2007B-2, effective as of August 31, 2009. On September 2, 2009, the Foundation filed with EMMA a material event notice consisting of the form of its Invitation to Offer Bonds dated September 2, 2009 (the September 2, 2009 Statement and the First Invitation to Offer Bonds ). On October 15, 2009, the Foundation filed with EMMA a material event notice consisting of a statement by the Foundation describing the Bond purchases that resulted from the First Invitation to Offer Bonds (the October 15, 2009 Statement ). On November 2, 2009, the Foundation filed with EMMA a material event notice consisting of statements by the Foundation and by Educational Credit Management Corporation ( ECMC ) concerning the anticipated assumption by ECMC of the FFEL Program guaranty agency functions then being discharged by the Foundation (the November 2, 2009 Statement ). Such assumption of such functions was completed substantially as described in the November 2, 2009 Statement. On January 15, 2010, the Foundation filed with EMMA a material event notice consisting of a statement by the Foundation describing certain negotiated repurchases of Student Loan Revenue Bonds (the January 15, 2010 Statement ). 7
On April 12, 2010, the Foundation filed with EMMA a preliminary annual notice with respect to the period ending September 30, 2009 (the 2009 Annual Notice ). The 2009 Annual Notice sets forth certain information with respect to the Foundation and to the Bonds including, among other things, the Foundation s unaudited financial statements for the fiscal year ended September 30, 2009, and certain student loan portfolio information. On July 8, 2010 and on July 9, 2010, the Foundation filed with EMMA three separate material event notices respectively consisting of documents titled Connecticut Student Loan Foundation Serviced by EdFinancial Services, LLC Report On Management s Assertions On Compliance With Specified Federal Family Education Loan Program Requirements Alternative Method October 1, 2008 through September 30, 2009, Connecticut Student Loan Foundation Serviced by Granite State Management and Resources Report On Management s Assertions On Compliance With Specified Federal Family Education Loan Program Requirements Alternative Method October 1, 2008 through September 30, 2009 and Connecticut Student Loan Foundation Serviced by Student Loan Marketing Association Report On Management s Assertions On Compliance With Specified Federal Family Education Loan Program Requirements Alternative Method October 1, 2008 through September 30, 2009 (collectively, the July 8, 2010 Servicing Statements ). Also on July 8, 2010 and on July 9, 2010, the Foundation filed with EMMA a material event notice consisting of a document titled Notice of Broker Dealer Agreement Termination and Substitution (the July 8, 2010 Broker-Dealer Statement ). The July 8, 2010 Broker-Dealer Statement disclosed that Samuel A. Ramirez & Co., Inc. replaced the prior broker-dealers for the auction rate remarketing of the Student Loan Revenue Bonds, Senior Series 2004A-1, Senior Series 2004A-2, Senior Series 2004A-3, Senior Series 2004A-4, Senior Series 2004A-5, Senior Series 2004A-6, Senior Series 2004A-7, Subordinate Series 2004B, Senior Series 2006A-1, Senior Series 2006A-2 and Subordinate Series 2006B. On August 9, 2010, the Foundation filed with EMMA, as a supplement to its 2009 Annual Notice, its audited financial statements for the period ending September 30, 2009 (the August 9, 2010 Supplemental Notice ). On May 3, 2011, the Foundation filed with EMMA an annual notice with respect to the period ending September 30, 2010 (the 2010 Annual Notice ). The 2010 Annual Notice sets forth certain information with respect to the Foundation and the Bonds including, among other things, the Foundation s audited financial statements for the fiscal year ended September 30, 2010, and certain student loan portfolio information. On May 11, 2011, the Foundation filed with EMMA a material event notice consisting of the form of its Invitation to Offer Bonds dated May 11, 2011 (the May 11, 2011 Statement and the Second Invitation to Offer Bonds ). On May 16, 2011, the Foundation filed a material event notice consisting of the form of an amendment to the Second Invitation to Offer Bonds (the May 16, 2011 Statement ). On June 7, 2011, the Foundation filed with EMMA a material event notice consisting of the form of a further amendment to the Second Invitation to Offer Bonds (the June 7, 2011 Statement ). On June 10, 2011, the Foundation filed with EMMA a material event notice consisting of a statement by the Foundation describing the Bond purchases that resulted from the Second Invitation to Offer Bonds (the June 10, 2011 Statement ). On July 6, 2011, the Foundation filed with EMMA a material event notice consisting of a press release by Fitch Ratings describing rating actions by Fitch Ratings with respect to the Bonds (the July 6, 2011 Statement ). The July 6, 2011 Statement described the upgrading by Fitch Ratings of the rating that it assigns to the Subordinate Bonds to AAsf/LS3; Outlook Stable and the affirmation by Fitch Ratings of the rating that it assigns to the Senior Bonds of AAAsf/LS1; Outlook Stable. 8
On November 9, 2011, the Foundation filed with EMMA a material event notice consisting of the form of its Invitation to Offer Bonds dated November 9, 2011 (the November 9, 2011 Statement and the Third Invitation to Offer Bonds ). On December 9, 2011, the Foundation filed with EMMA a material event notice consisting of a statement by the Foundation describing the Bond purchases that resulted from the Third Invitation to Offer Bonds (the December 9, 2011 Statement ). On March 22, 2012, the Foundation filed with EMMA a material event notice consisting of a statement by the Foundation describing certain redemptions of Student Loan Revenue Bonds (the March 22, 2012 Statement ). On April 9, 2012, the Foundation filed with EMMA a material event notice consisting of a press release by Standard & Poor s Ratings Services describing rating actions by Standard & Poor s Ratings Services with respect to the Bonds (the April 9, 2012 Statement ). The April 9, 2012 Statement described the upgrading by Standard & Poor s Ratings Services of the rating that it assigns to the Subordinate Bonds to A(sf)/Watch Pos and of the rating that it assigns to the Senior Bonds to AAA(sf). On May 14, 2012, the Foundation filed with EMMA a material event notice consisting of a press release by Fitch Ratings describing ratings actions by Fitch Ratings with respect to the Bonds (the May 14, 2012 Statement ). The May 14, 2012 Statement described the upgrading by Fitch Ratings of the rating that it assigns to the Subordinate Bonds to AAsf; Outlook Stable and the affirmation by it of the rating of AAAsf; Outlook Negative that it assigns to the Senior Bonds. On June 29, 2012, the Foundation filed with EMMA a material event notice consisting of a statement by the Foundation describing certain redemptions of Student Loan Revenue Bonds (the June 29, 2012 Statement ). On July 17, 2012 the Foundation filed with EMMA a material event notice addressing the release of certain FFELP Loans from the Trust Estate (the July 17, 2012 Statement ). On July 19, 2012, the Foundation filed with EMMA an annual notice with respect to the period ending September 30, 2011 (the 2011 Annual Notice ). The 2011 Annual Notice sets forth certain information with respect to the Foundation and the Bonds including, among other things, the Foundation s audited financial statements for the fiscal year ended September 30, 2011, and certain student loan portfolio information. On July 20, 2012, the Foundation filed with EMMA a material event notice consisting of a RatingsDirect market update from Standard & Poor s Rating Services stating that the rating that it assigns to the Subordinate Bonds remains A(sf)/Watch POS pending receipt by it of updated trust collateral and note composition data (the July 20, 2012 Statement ). On July 27, 2012, the Foundation filed with EMMA a notice pursuant to Section 15c2-12(b)(5)(i)(D) disclosing that the Foundation s 2011 Annual Notice was not filed with EMMA within the time period provided by such continuing disclosure agreements, although such annual financial information had been supplied by the Foundation to the bond trustee for this purpose on March 15, 2012, as required by such continuing disclosure agreements, and was filed with EMMA on July 19, 2012, promptly after the Foundation discovered that such filing had not been completed in a timely manner (the July 27, 2012 Statement ). The Foundation expects to file with EMMA a material event notice consisting of the form of this Invitation to Offer Bonds (the Current Invitation Statement ). 9
The Foundation has failed, within the past five years, to file annual notices with respect to the Bonds within the period prescribed by its continuing disclosure undertakings applicable to the Bonds. Copies of the 2008 Annual Notice, the June 1, 2009 Statement, the August 26, 2009 Statement, the September 1, 2009 Statement, the September 2, 2009 Statement, the October 15, 2009 Statement, the November 2, 2009 Statement, the January 15, 2010 Statement, the 2009 Annual Notice, the July 8, 2010 Servicing Statements, the July 8, 2010 Broker-Dealer Statement, the August 9, 2010 Supplemental Notice, the 2010 Annual Notice, the May 11, 2011 Statement, the May 16, 2011 Statement, the June 7, 2011 Statement, the June 10, 2011 Statement, the July 6, 2011 Statement, the November 9, 2011 Statement, the December 9, 2011 Statement, the March 22, 2012 Statement, the April 9, 2012 Statement, the May 14, 2012 Statement, the June 29, 2012 Statement, the July 17, 2012 Statement, the 2011 Annual Notice, the July 20, 2012 Statement, the July 27, 2012 Statement and the Current Invitation Statement (collectively, the EMMA Filings ) may be obtained through EMMA, without charge, pursuant to the MSRB s regular procedures. Information concerning such procedures is available at www.emma.msrb.org. Copies of each of the Official Statements of the Foundation with respect to the initial offering of a Series (each, an Official Statement and collectively, the Official Statements ) and certain information concerning the trust estate securing the Bonds (the Trust Estate ) and the loans included in the Trust Estate may be obtained via the Internet, from the Foundation s web site at www.cslf.com/investorinformation. In addition, at its sole and absolute discretion, the Foundation may from time to time prior to the Expiration Date post on such web site additional information, including, without limitation, responses to questions received by the Dealer Manager, and subsequently forwarded to the Foundation, with respect to this Invitation that the Foundation believes may be of general interest to Bondowners considering Offers on its web site. There is hereby included in this Invitation by this reference the information contained in the EMMA Filings and, with respect to each Series, the applicable Official Statement. The Official Statements contain information concerning the Bonds and the security for the Bonds, which includes information concerning the sources of payment of Bond principal and interest, the limitations upon the Foundation s obligation to make such payment and the absence of any obligation of the State of Connecticut to make such payment. Bondowners are advised that the portions of the Official Statements that are applicable to each Series of Bonds that they own should be read in their entirety in connection with this Invitation. Current Trust Estate Administration. The Foundation has ceased to act as a FFEL Program guaranty agency or as a student loan servicer. As of June 30, 2012: (i) ECMC was the FFEL Program guaranty agency for approximately 90.3% of the FFELP Loans included in the Trust Estate and United Student Aid Funds ( USAF ) was the FFEL Program guaranty agency for approximately 9.2% of such FFELP Loans; and (ii) EdFinancial Services, LLC ( EdFinancial ) was the servicer for substantially all student loans included in the Trust Estate. On June 29, 2012 the Foundation completed a sale to the Student Loan Marketing Association, Inc. ( SLM ) of substantially all of the FFELP Loans that were previously included in the Trust Estate and serviced by SLM. The Foundation currently has no employees and has assigned direct responsibility for Trust Estate administration and for compliance with the Indenture requirements applicable to the Foundation to Education Solution Partners, LLC ( ESP ), as administrative agent. This Invitation does not include information concerning any of ECMC, USAF, EdFinancial, SLM or ESP and Bondholders who believe such information to be relevant to their decision as to whether to Offer Bonds should consult their broker-dealer or financial advisor or make their own investigation. Certain Recent and Pending Federal Legislation. On March 30, 2010, President Obama signed the Health Care and Education Affordability Reconciliation Act of 2010 ( HCEARA ). Pursuant to HCEARA, beginning on July 1, 2010, additional FFELP loans may no longer be originated pursuant to 10
the Higher Education Act and new federal student loans will be originated solely under the Federal Direct Student Loan Program. However, FFELP loans originated under the Higher Education Act prior to July 1, 2010, including FFELP loans currently held in the Trust Estate, continue to be subject to the provisions of the Higher Education Act. The Higher Education Act has been subject to frequent amendments over the years, including several amendments that have changed the terms of and eligibility requirements for FFELP loans. There can be no assurance that the Higher Education Act or other relevant federal or State laws, rules and regulations will not be changed in the future in a manner that might adversely impact the net revenues received by the Trust Estate from FFELP loans held in the Trust Estate or that might affect the rate of principal repayment, performance or market value of such FEELP loans or the ability of the Foundation to administer the Trust Estate. As of June 30, 2011, approximately ninetyeight percent of the education loans included in the Trust Estate were FFELP loans. During the current federal fiscal year the federal Department of Education has offered certain borrowers who had both FFELP loans with private holders, such as the Foundation, and certain loans originated under the Higher Education Act with the Department of Education as the lender an opportunity to convert their FFELP Loans to loans with the Department of Education as the lender, which new loans would have the same terms and conditions as the converted FFELP Loans except for certain economic incentives (the 2012 Conversion Option ). Under this offer, the holder of the FFELP Loan receives prepayment of the full outstanding principal and interest balance upon such conversion. As of June 30, 2012, the Foundation received approximately $10.8 million in aggregate principal of the FFELP Loans previously included in the Trust Estate as a result of the borrowers exercise of the 2012 Conversion Option. Implementation of federal policies to encourage the conversion or refinancing of FFELP Loans might increase the rate of principal payment of the FFELP loans currently held in the Trust Estate and might affect the characteristics of the remaining FFELP loans currently held in the Trust Estate. No assurance can be given as to the percentage of the principal balance of the FFELP loans currently held in the Trust Estate that may be subject to prepayment as a result of the continued implementation of such policies. There can also be no assurance as to the likelihood that these policy initiatives will be implemented, the timing and duration of any such implementation or likelihood that such implementation may take a form that modifies their currently intended effect. The Foundation and the Dealer Manager do not undertake, and expressly disclaim, any duty to advise Bondowners as to any changes in proposed or effective federal or State laws, rules or regulatory requirements that may occur prior to the Settlement Date. 2. Source of Funds to Purchase Bonds The Foundation expects to apply available funds currently held as part of the Trust Estate to purchase Offered Bonds with acceptable Offer Prices. The Foundation has committed to make available a minimum of $40,000,000 to purchase Offered Bonds that are Senior Bonds with Offer Prices that do not exceed the Senior Offer Price Ceiling, but reserves the right to make additional funds available to purchase Offered Bonds that are Senior Bonds, to increase the Senior Offer Price Ceiling and to make additional funds available to purchase Offered Bonds that are Subordinate Bonds in response to Offers, as described herein. 3. Certain Potential Adverse Effects of Invitation on Owners of Bonds The purchase by the Foundation of Bonds of any Series may have certain potential adverse effects on owners who do, or who do not, submit Offers, including but not limited to the following: 11
The principal amount of the Bonds of such Series available to trade publicly will be reduced, which could adversely affect the liquidity and market value of the Bonds of such Series that remain outstanding. The Foundation may also repurchase Bonds through negotiated secondary market purchases, or through subsequent invitations to offer Bonds, which may further reduce the liquidity and market value of the Bonds that remain outstanding and may, under certain circumstances, indirectly affect accounting valuation of such Bonds. Such purchases may be at prices that are higher than, or that are lower than, accepted Offer Prices and may have other terms that vary from those applicable to Offers. The Foundation reserves the right to conclude such purchases at any time, subject to compliance with applicable Trust Estate indenture requirements. The amount of funds held as part of the Trust Estate will be reduced, which would reduce the availability within the Trust Estate of certain funds that may be applied to fund the potential partial par redemption of Bonds. The Foundation may also take certain other actions to increase the amount of cash available in the Trust Estate, or to decrease the amount of outstanding auction rate Bonds, such as selling Eligible Loans credited to the Trust Estate, converting auction rate Bonds to fixed rate Bonds or to variable rate demand Bonds or issuing securities to refund auction rate Bonds. There can be no assurance that any such other action will be economically feasible at any time. Even if economically feasible, the Foundation is not required to take, and may determine not to take, any such other action. The Foundation does, however, reserve the right to take any such other action at any time. The implementation of one or more such other actions may result in some or all of the then outstanding auction rate Bonds being redeemed at par. There can be no assurance, however, that all, or any specific portion, of a Bondowner s Bonds will be redeemed at par prior to their maturity, or as to the timing of any such redemption. 4. Expiration Date The ability to Offer Bonds for sale to the Foundation will expire at 5:00 p.m. on September 18, 2012 or on such earlier or later date as the Foundation may determine (the Expiration Date ). See 20. Extension of Offer Submission Period; Termination and Amendment of Invitation; Changes to Terms. 5. Information About Invitation The Foundation will give information about this Invitation to the market and Bondowners by delivery of the information to the following institutions: The Depository Trust Company. Municipal Securities Rulemaking Board (EMMA). Samuel A. Ramirez & Co. Inc., as Dealer Manager and as broker-dealer for the auction rate remarketing of the Bonds (in such capacity, the Broker-Dealer ). These institutions are called the Information Services. Delivery by the Foundation of information to the Information Services will be deemed to constitute delivery of this information to each Bondowner. None of the Foundation, the Broker-Dealer, the Dealer Manager, the Trustee or the Dissemination Agent have any obligation to ensure that a Bondowner actually receives any information given to the Information Services. 12
A Bondowner who would like to receive information transmitted by the Foundation to the Information Services must make appropriate arrangements with its broker-dealer or directly with the Information Services. 6. How Offers Can Be Made Offers can be made only through the automated tender offer program ( ATOP ) account to be established pursuant to DTC procedures as described in Section 10 of this Invitation. Bondowners who are not DTC participants and who wish to make an offer should contact their broker-dealer, bank, trust company or another financial institution that is a DTC participant to submit their offer through this ATOP account. See 8. Provisions Applicable to all Offers Offers of Book-Entry-Only Bonds and 9. Procedures for Offering Bonds Held through Brokers and Banks. A Bondowner may make one or more Offers to sell its Bonds of a particular Series in a maximum par amount of its choosing to the Foundation; provided, that the par amount Offered is an integral multiple of $25,000 (the Minimum Denomination and, with respect to integral multiples thereof, the Authorized Denominations ) and at an Offer Price of its choosing, expressed as described in the next paragraph. Each Offer Price must be expressed in dollars per $1,000 of the maximum par amount of the Bonds of the particular Series Offered. An Offer Price may contain no more than one number to the right of the decimal point. Any Offer Price containing more than one number to the right of the decimal point will not be processed, and will be automatically rejected by DTC. An Offer Price may exceed the Senior Offer Price Ceiling; however, the Foundation is not required to accept any Offer that specifies such an Offer Price. A Bondowner may Offer to sell to the Foundation portions of the Bonds of a particular Series that it owns at more than one Offer Price or all or a portion of the Bonds of different Series that it owns at the same or at different Offer Prices, so long as each Offer independently conforms to the foregoing requirements and does not exceed the par amount of the applicable Series of Bonds owned by that Bondowner. 7. Accrued Interest An Offer Price for Bonds must not include any amount representing Accrued Interest. For Bonds accepted for purchase, Accrued Interest will be added to the Offer Price (in aggregate, the Purchase Price ) and paid on the Settlement Date. 8. Provisions Applicable to all Offers Need for Advice. A Bondowner should ask its account representative at the financial institution that maintains the account in which its Bonds are held, or another financial advisor, for help in determining: whether to Offer Bonds for sale to the Foundation; the par amount of Bonds of any CUSIP to be Offered for sale to the Foundation; what the Offer Price(s) should be; 13