Approximately $1.1 billion of asset backed securities affected
New York, July 10, 2015 -- Moody's Investors Service has placed on review for downgrade one
tranche and corrected erroneous review actions on three other tranches
backed by student loans originated under the Federal Family Education
Loan Program (FFELP). The loans are guaranteed by the U.S.
government for a minimum of 97% of defaulted principal and accrued
interest. Navient Solutions, Inc., formerly
known as Sallie Mae, Inc., is the sponsor, administrator
and servicer of the transactions.
RATINGS RATIONALE
Today's actions reflect the correction of an error in assessing
the risk that the tranches will not fully pay down by their respective
final maturity dates. In its June 22, 2015, rating
actions, Moody's used incorrect final maturity date information
for these tranches. Using the corrected information, Moody's
has now identified Class A-6 in SLM Student Loan Trust 2003-14
as a class that might not fully pay off by its final maturity date,
while Classes A-5A and A-6 from SLM Student Loan Trust 2005-6
are less likely to default due to the failure to fully amortize by their
respective final maturity dates based on the current payment rate of the
underlying loans. Today's actions reflect this corrected
information.
In addition, Class B in SLM Student Loan Trust 2002-5,
which was also erroneously placed on review on June 22, 2015,
was in fact paid off in full on June 15, 2015, since the sponsor
called the bonds. Moody's has therefore withdrawn the rating
on the Class B tranche as of that date.
The principal methodology used in these ratings was "Moody's Approach
to Rating Securities Backed by FFELP Student Loans" published in April
2012. Please see the Credit Policy page on www.moodys.com
for a copy of this methodology.
The performance expectations for a given variable indicate Moody's forward-looking
view of the likely range of performance over the medium term. From
time to time, Moody's may, if warranted, change these
expectations. Performance that falls outside the given range may
indicate that the collateral's credit quality is stronger or weaker than
Moody's had anticipated when the related securities ratings were issued.
Even so, a deviation from the expected range will not necessarily
result in a rating action nor does performance within expectations preclude
such actions. The decision to take (or not take) a rating action
is dependent on an assessment of a range of factors including, but
not exclusively, the performance metrics.
Factors that would lead to a downgrade of the rating:
The factors that could drive the rating down are continued low levels
of voluntary prepayments, high levels of deferment and forbearance,
and growing use of Income Based Repayment or Extended Repayment plans.
The complete rating action is the following:
Issuer: SLM Student Loan Trust 2003-14
Cl. A-6, Aaa (sf) Placed under Review for Possible
Downgrade; previously on May 5, 2014 Affirmed Aaa (sf)
In addition, the rating history has been corrected for the following:
Issuer: SLM Student Loan Trust 2005-6
Cl. A-5A, Removed Review for Possible Downgrade dated
Jun 22, 2015; Current Rating Aaa (sf) Affirmed on May 5,
2014
Cl. A-6, Removed Review for Possible Downgrade dated
Jun 22, 2015; Current Rating Aaa (sf) Affirmed on May 5,
2014
Issuer: SLM Student Loan Trust 2002-5
Class B, Removed Review for Possible Downgrade dated Jun 22,
2015; Current Rating WR (sf) on Jun 15, 2015
REGULATORY DISCLOSURES
For further specification of Moody's key rating assumptions and sensitivity
analysis, see the sections Methodology Assumptions and Sensitivity
to Assumptions of the disclosure form.
Moody's did not use any models, or loss or cash flow analysis,
in its analysis.
Moody's quantitative analysis entails an evaluation of scenarios
that stress factors contributing to sensitivity of ratings and take into
account the likelihood of severe collateral losses or impaired cash flows.
For ratings issued on a program, series or category/class of debt,
this announcement provides certain regulatory disclosures in relation
to each rating of a subsequently issued bond or note of the same series
or category/class of debt or pursuant to a program for which the ratings
are derived exclusively from existing ratings in accordance with Moody's
rating practices. For ratings issued on a support provider,
this announcement provides certain regulatory disclosures in relation
to the rating action on the support provider and in relation to each particular
rating action for securities that derive their credit ratings from the
support provider's credit rating. For provisional ratings,
this announcement provides certain regulatory disclosures in relation
to the provisional rating assigned, and in relation to a definitive
rating that may be assigned subsequent to the final issuance of the debt,
in each case where the transaction structure and terms have not changed
prior to the assignment of the definitive rating in a manner that would
have affected the rating. For further information please see the
ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.
For any affected securities or rated entities receiving direct credit
support from the primary entity(ies) of this rating action, and
whose ratings may change as a result of this rating action, the
associated regulatory disclosures will be those of the guarantor entity.
Exceptions to this approach exist for the following disclosures,
if applicable to jurisdiction: Ancillary Services, Disclosure
to rated entity, Disclosure from rated entity.
Regulatory disclosures contained in this press release apply to the credit
rating and, if applicable, the related rating outlook or rating
review.
Please see www.moodys.com for any updates on changes to
the lead rating analyst and to the Moody's legal entity that has issued
the rating.
Please see the ratings tab on the issuer/entity page on www.moodys.com
for additional regulatory disclosures for each credit rating.
Jinwen Chen
Analyst
Structured Finance Group
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
Debashish Chatterjee
Associate Managing Director
Structured Finance Group
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
Releasing Office:
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
Moody's reviews for downgrade one tranche and corrects erroneous review actions for three tranches in Navient's FFELP student loan securitizations