"OUR money in educational loans that he now cannot sell?"
Interest income and other income increased from approximately $191,000 for the three months ended February 28, 2007 to approximately $318,000 for the three months ended February 29, 2008 as interest bearing account balances increased from cash received as distributions from our investment in PDS.
During the quarter ended February 29, 2008, investment banks were reporting an inability to successfully obtain subscribers for high credit quality auction rate securities. As of February 29, 2008 we held such auction rate securities with a par value totaling $10.4 million that failed in February 2008 to sell at auction.
On March 3 and March 12, 2008 the remainder of our auction rate securities with a par value of $5,000,000 failed to sell at auction. The investments consist of student loan auction rate preferred instruments issued by various state agencies pursuant to the Federal Family Educational Loan Program (FFELP). These investments are of high credit quality and the AAA credit ratings of the investments have been reaffirmed since March 2008. These instruments are collateralized in excess of the underlying obligations, are insured by the various state educational agencies, and are guaranteed by the Department of Education as an insurer of last resort. We have the intent and the ability to hold these investments until the anticipated recovery period which we believe will be less than twelve months.
