For the first time since Feb. 10, some student loan bonds previously issued by the Montana Higher Education Student Assistance Corp. were resold on Wall Street on Thursday.

A total of $30 million of MHESAC's taxable bonds were resold at an auction-rate auction, said Jim Stipcich, chief executive officer of MHESAC's business manager, the Student Assistance Foundation.

"It's clear that some investors are looking at this from the quality of the assets financed by these bonds," Stipcich said in a telephone interview. "It's a positive side relative to these bonds."

Agreeing was Montana Commissioner of Higher Education Sheila Stearns, the president but nonvoting member of MHESAC's board.

"It sounds like a positive development," she said.

Unfortunately, Stipcich said, Wall Street auctions failed this week for a total of $169.2 million of bonds previously issued by MHESAC. These were for $155.9 million worth of tax-exempt auction bonds and $13.3 million of taxable auction bonds.

That brings to $952.8 million the auction failures associated with MHESAC's previously issued auction-rate bonds since Feb. 10. Of those, $813.8 million were tax-exempt, he said, while $139 million were taxable.

The next auctions involving previously issued MHESAC-issued bonds are set for Tuesday, Wednesday and Thursday of next week and March 11, Stipcich said.

A total of $1.1 billion of MHESAC's $2 billion of total debt is invested in these auction bonds, which were issued between 1995 and 2006.

These failures have been part of the credit and liquidity crisis on Wall Street that is affecting bonds used to finance student loans in other states, hospitals, museums and other public uses, as well as private ones.

Wall Street auction bonds, issued in $100,000 units and sold to institutional investors, are like long-term debt. They roll over every 35 days when the interest rate is reset to match current rates. The same institutional investors that hold the bonds usually buy them again, with the interest rate adjusted.

However, these investors have the option of selling these bonds to someone else through a third-party.

Auctions for billions of dollars of auction bonds have failed in recent weeks, with no one buying the bonds. As a result, current bondholders are required to keep these bonds, even if they don't want them.

The interest rate on bonds after failed auctions is determined by a preset formula based on market indices. Earlier this month, these bondholders had to be paid a higher interest rate because of the failed auctions, although those rates have dropped.

The Wall Street Journal and Bloomberg have reported that the bond auctions associated with student loans and other financings by major investment banks on Wall Street, including Goldman Sachs Group, J.P. Morgan Chase and Citigroup Inc., have failed to interest investors.

"We will remain very concerned about the failure of the auctions, and we will continue to work diligently to develop strategies to refinance a significant portion of its outstanding auction bond securities," Stipcich said in a press release.

MHESAC's ability to refinance, he said, depends on a number of factors, including the availability of certain financing vehicles, if applicable, and related liquidity and credit enhancement facility, or both.

Stipcich emphasized again that the current financing problems on Wall Street won't affect student loans targeted for Montana college loans this fall.

"The most important message is that MHESAC has financing in place for Montana student loans for next fall -- $175 million for the 20082008 academic year -- and we do not anticipate any impact on the availability of such MHESAC funds for providing student loans to Montanans."

The remaining $900 million in MHESAC debt not invested in auctions bonds includes $725 million in fixed-rate bonds or bonds financed at a fixed spread over a given index. The remaining $175 million is invested in variable-rate demand obligations issued in December 2007 that require a third-party to buy the bonds if sellers want to sell and other buyers aren't available.