UPDATE: Bank of America Reiterates on ITT Educational Services on Additional Issues Related to PEAKS Loans

In a report published Monday, Bank of America analyst Sara Gubins reiterated a Neutral rating on

, but lowered the price target from $36.00 to $32.00. In the report, Bank of America noted, “After Friday's close, ITT announced that it has entered into an agreement with the PEAKS' (prior third-party private loan program) trustee and creditors that bars it from making further payments on behalf of students. In connection, ITT made a $40mn prepayment to the PEAKS trust (recorded in 1Q14). The company also increased its 2014 projected private loan related payments from $30-50mn to $100-120mn (inc. $40mn prepayment). "In our view, it remains unclear if the revised outlook in excess of the $40mn prepayment is for future prepayments and/or higher default assumptions for PEAKS (currently at 64%). ITT did not revise other elements of its 2014 guidance.” ITT Educational Services closed on Friday at $29.95.