Fitch Rates SLM Student Loan Trust 2013-2
NEW YORK -- April 11, 2013
Fitch Ratings assigns ratings to SLM Student Loan Trust 2013-2 as follows:
--$1,211,000,000 floating rate class A notes, 'AAAsf'; Outlook Negative;
--$35,000,000 floating rate class B notes, 'A+sf'; Outlook Stable.
KEY RATING DRIVERS
High Collateral Quality: The trust collateral consists of 100% FFELP student
loans with guaranties provided by the transaction's eligible guarantors for at
least 97% of principal and accrued interest, and the reinsurance provided by
the U.S. Department of Education (ED).
Sufficient Credit Enhancement (CE): Cash flow scenarios for the class A and B
notes were satisfactory under Fitch's stresses. At closing, total parity is
expected to be 100.80% and senior parity is expected to be 103.71%. Total
credit enhancement (CE) is provided by overcollateralization (OC; about $9.95
million at closing), excess spread, and, in the case of class A notes, 2.8%
subordination provided by the class B notes.
Adequate Liquidity Support: Liquidity support for the SLM 2013-2 notes is
provided by a $7.49 million reserve account (0.60% of outstanding notes),
funded at closing with note proceeds.
Satisfactory Servicing Capabilities: Sallie Mae, Inc., as servicer, will be
responsible for servicing the 2013-2 portfolio. Fitch believes Sallie Mae is
an acceptable servicer of FFELP student loans.
Negative Rating Outlooks Assigned: Fitch's Rating Outlook for all existing and
new issuances of 'AAAsf' rated tranches of FFELP securitizations remains
Negative, which reflects Fitch's Negative Rating Outlook on the long-term
foreign and local currency Issuer Default Ratings (IDRs) of the U.S.
Since FFELP student loan ABS rely on the U.S. government to reimburse
defaults, 'AAAsf' FFELP ABS ratings will likely move in tandem with the 'AAA'
U.S. sovereign rating. Aside from the U.S. sovereign rating, defaults and
basis risk account for the majority of the risk embedded in FFELP student loan
transactions. Additional defaults and basis shock beyond Fitch's published
stresses could result in future downgrades. Likewise, a buildup of credit
enhancement driven by positive excess spread given favorable basis factor
conditions could lead to future upgrades.
Key Rating Drivers and Rating Sensitivities are further described in the
pre-sale report titled 'SLM Student Loan Trust 2013-2', dated April 2, 2013,
available on www.fitchratings.com.
Additional information is available at 'www.fitchratings.com'. The ratings
above were solicited by, or on behalf of, the issuer, and therefore, Fitch has
been compensated for the provision of the ratings.
Applicable Criteria and Related Research:
--'Global Structured Finance Rating Criteria' (June 6, 2012);
--'Rating U.S. Federal Family Education Loan Program Student Loan ABS
Criteria' (April 1, 2013);
--'SLM Student Loan Trust 2013-2' (April 2, 2013).
Applicable Criteria and Related Research
Global Structured Finance Rating Criteria
Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria
SLM Student Loan Trust 2013-2 (US ABS)
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Charlene M. Davis, +1-212-908-0213
Fitch Ratings, Inc.
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