Approximately $15.7 billion of asset-backed securities affected
NOTE: On October 17, 2013, the press release was revised as follows: The secondary contact was amended to:
John Park
MD – Structure Finance.
Revised release follows.
New York, October 15, 2013 -- Moody's Investors Service has confirmed 57 classes of notes, placed
on review for downgrade one class of notes and placed on review for upgrade
thirteen classes of notes from 24 private student loan securitizations
sponsored, administered and currently serviced by Sallie Mae,
Inc., a wholly-owned subsidiary of SLM Corporation
(SLM). The underlying collateral consists of private credit student
loans that are not guaranteed or reinsured under either the Federal Family
Education Loan Program (FFELP) or any other federal student loan program.
RATINGS RATIONALE
Today's confirmations, which conclude the watch action announced
in May 2013, are the result of SLM's disclosure on 9 September
2013 that servicing of the existing private loan securitizations will
be performed at the education loan management business rather than the
consumer banking business. The education loan management business
has sufficient scale and franchise value to remain intact even during
severely stressed economic conditions. This arrangement significantly
reduces the operational risk and the risk of the future servicing disruption
for SLM's private student loan securitizations.
On 29 May 2013 SLM announced its intention to separate its education loan
management business and consumer banking business. The private
student loans would be serviced by the entity holding the consumer banking
business, which is considerably smaller and less diversified than
SLM in its current integrated form. Because the securitizations
do not include back-up servicing provisions, the small scale
and lack of diversification of the consumer banking business would increase
the probability of servicing disruption, which would negatively
affect performance of the underlying private student loan pools.
As a result, the notes were placed on review for downgrade.
The revised arrangement disclosed on 9 September 2013, however,
mitigates the operational risk in SLM's private student loan securitizations.
Today's reviews for downgrade and upgrade were prompted by correction
of the cash flow models we used in our June 2011 rating actions.
The models had incorrectly calculated principal distribution amount to
various classes of notes and paid interest on subordinate notes when the
cash should have been distributed to senior notes as principal payment.
The correction of the models is expected to have a generally positive
impact on senior notes and a generally negative impact on subordinate
notes.
During the review period, Moody's will refine the lifetime defaults
for the transactions and perform cash flow analysis in order to determine
the appropriate ratings.
The principal methodology used in these rating actions was "Moody's Approach
to Rating U.S. Private Student Loan-Backed Securities",
published on 6 January 2010, and "Global Structured Finance
Operational Risk Guidelines: Moody's Approach to Analyzing Performance
Disruption Risk", published on 28 June 2011. Please
see the Credit Policy page on www.moodys.com for a copy
of these methodologies.
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.
RATINGS
Issuer: SLM Private Credit Student Loan Trust 2002-A
Class A-2, Confirmed at Aaa (sf); previously on May
30, 2013 Aaa (sf) Placed Under Review for Possible Downgrade
Class B, Confirmed at Aa3 (sf); previously on May 30,
2013 Aa3 (sf) Placed Under Review for Possible Downgrade
Issuer: SLM Private Credit Student Loan Trust 2003-A
Class A-2, Confirmed at Aaa (sf); previously on May
30, 2013 Aaa (sf) Placed Under Review for Possible Downgrade
Class C, Ba3 (sf) Placed Under Review for Possible Downgrade;
previously on Jun 9, 2011 Downgraded to Ba3 (sf)
Issuer: SLM Private Credit Student Loan Trust 2003-B
Class A-2, Aa2 (sf) Placed Under Review for Possible Upgrade;
previously on May 30, 2013 Aa2 (sf) Placed Under Review for Possible
Downgrade
Class A-3, A3 (sf) Placed Under Review for Possible Upgrade;
previously on Jun 9, 2011 Downgraded to A3 (sf)
Class A-4, A3 (sf) Placed Under Review for Possible Upgrade;
previously on Jun 9, 2011 Downgraded to A3 (sf)
Class B, Baa3 (sf) Placed Under Review for Possible Upgrade;
previously on Jun 9, 2011 Downgraded to Baa3 (sf)
Issuer: SLM Private Credit Student Loan Trust 2003-C
Cl. A-2, Aa2 (sf) Placed Under Review for Possible
Upgrade; previously on May 30, 2013 Aa2 (sf) Placed Under Review
for Possible Downgrade
Cl. A-3, Baa1 (sf) Placed Under Review for Possible
Upgrade; previously on Jun 9, 2011 Downgraded to Baa1 (sf)
Cl. A-4, Baa1 (sf) Placed Under Review for Possible
Upgrade; previously on Jun 9, 2011 Downgraded to Baa1 (sf)
Cl. A-5, Baa1 (sf) Placed Under Review for Possible
Upgrade; previously on Jun 9, 2011 Downgraded to Baa1 (sf)
Cl. B, Baa3 (sf) Placed Under Review for Possible Upgrade;
previously on Jun 9, 2011 Downgraded to Baa3 (sf)
Issuer: SLM Private Credit Student Loan Trust 2004-A
Cl. A-2, Confirmed at Aaa (sf); previously on
May 30, 2013 Aaa (sf) Placed Under Review for Possible Downgrade
Cl. A-3, Confirmed at Aa1 (sf); previously on
May 30, 2013 Aa1 (sf) Placed Under Review for Possible Downgrade
Issuer: SLM Private Credit Student Loan Trust 2004-B
Cl. A-2, Confirmed at Aaa (sf); previously on
May 30, 2013 Aaa (sf) Placed Under Review for Possible Downgrade
Cl. A-3, Confirmed at Aaa (sf); previously on
May 30, 2013 Aaa (sf) Placed Under Review for Possible Downgrade
Cl. A-4, Confirmed at Aaa (sf); previously on
May 30, 2013 Aaa (sf) Placed Under Review for Possible Downgrade.
Cl. B, Confirmed at Aa3 (sf); previously on May 30,
2013 Aa3 (sf) Placed Under Review for Possible Downgrade
Issuer: SLM Private Credit Student Loan Trust 2005-A
Cl. A-2, Confirmed at Aaa (sf); previously on
May 30, 2013 Aaa (sf) Placed Under Review for Possible Downgrade
Cl. A-3, Confirmed at Aa1 (sf); previously on
May 30, 2013 Aa1 (sf) Placed Under Review for Possible Downgrade
Cl. A-4, Confirmed at Aa2 (sf); previously on
May 30, 2013 Aa2 (sf) Placed Under Review for Possible Downgrade
Issuer: SLM Private Credit Student Loan Trust 2005-B
Cl. A-2, Confirmed at Aa1 (sf); previously on
May 30, 2013 Aa1 (sf) Placed Under Review for Possible Downgrade
Cl. A-3, Confirmed at Aa1 (sf); previously on
May 30, 2013 Aa1 (sf) Placed Under Review for Possible Downgrade
Cl. A-4, Confirmed at Aa3 (sf); previously on
May 30, 2013 Aa3 (sf) Placed Under Review for Possible Downgrade
Cl. B, A2 (sf) Placed Under Review for Possible Upgrade;
previously on Jun 9, 2011 Downgraded to A2 (sf)
Issuer: SLM Private Credit Student Loan Trust 2006-A
Cl. A-3, Confirmed at Aaa (sf); previously on
May 30, 2013 Aaa (sf) Placed Under Review for Possible Downgrade
Cl. A-4, Confirmed at Aa1 (sf); previously on
May 30, 2013 Aa1 (sf) Placed Under Review for Possible Downgrade
Cl. A-5, Aa3 (sf) Placed Under Review for Possible
Upgrade; previously on May 30, 2013 Aa3 (sf) Placed Under Review
for Possible Downgrade
Issuer: SLM Private Credit Student Loan Trust 2006-B
Cl. A-3, Confirmed at Aaa (sf); previously on
May 30, 2013 Aaa (sf) Placed Under Review for Possible Downgrade
Cl. A-4, Confirmed at Aa2 (sf); previously on
May 30, 2013 Aa2 (sf) Placed Under Review for Possible Downgrade
Cl. A-5, Confirmed at Aa3 (sf); previously on
May 30, 2013 Aa3 (sf) Placed Under Review for Possible Downgrade
Cl. B, A2 (sf) Placed Under Review for Possible Upgrade;
previously on Jun 9, 2011 Downgraded to A2 (sf)
Issuer: SLM Private Credit Student Loan Trust 2006-C
Cl. A-3, Confirmed at Aaa (sf); previously on
May 30, 2013 Aaa (sf) Placed Under Review for Possible Downgrade
Cl. A-4, Confirmed at Aa2 (sf); previously on
May 30, 2013 Aa2 (sf) Placed Under Review for Possible Downgrade
Cl. A-5, A1 (sf) Placed Under Review for Possible
Upgrade; previously on Jun 9, 2011 Downgraded to A1 (sf)
Issuer: SLM Private Education Loan Trust 2009-CT
Floating Rate Class I-A Notes, Confirmed at Aaa (sf);
previously on May 30, 2013 Aaa (sf) Placed Under Review for Possible
Downgrade
Floating Rate Class II-A Notes, Confirmed at Aaa (sf);
previously on May 30, 2013 Aaa (sf) Placed Under Review for Possible
Downgrade
Issuer: SLM Private Education Loan Trust 2010-A
Group I - Floating Rate Cl. I-A Notes, Confirmed
at Aaa (sf); previously on May 30, 2013 Aaa (sf) Placed Under
Review for Possible Downgrade
Group II Floating Rate Cl. II-A Notes, Confirmed at
Aaa (sf); previously on May 30, 2013 Aaa (sf) Placed Under
Review for Possible Downgrade
Issuer: SLM Private Education Loan Trust 2010-B
Floating Rate Cl. A-2 Note, Confirmed at Aaa (sf);
previously on May 30, 2013 Aaa (sf) Placed Under Review for Possible
Downgrade
Floating Rate Cl. A-3 Note, Confirmed at Aaa (sf);
previously on May 30, 2013 Aaa (sf) Placed Under Review for Possible
Downgrade
Issuer: SLM Private Education Loan Trust 2010-C
Cl. A-1, Confirmed at Aaa (sf); previously on
May 30, 2013 Aaa (sf) Placed Under Review for Possible Downgrade
Cl. A-2, Confirmed at Aaa (sf); previously on
May 30, 2013 Aaa (sf) Placed Under Review for Possible Downgrade
Cl. A-3, Confirmed at Aaa (sf); previously on
May 30, 2013 Aaa (sf) Placed Under Review for Possible Downgrade
Cl. A-4, Confirmed at Aaa (sf); previously on
May 30, 2013 Aaa (sf) Placed Under Review for Possible Downgrade
Cl. A-5, Confirmed at Aaa (sf); previously on
May 30, 2013 Aaa (sf) Placed Under Review for Possible Downgrade
Issuer: SLM Private Education Loan Trust 2011-A
Class A-1, Confirmed at Aaa (sf); previously on May
30, 2013 Aaa (sf) Placed Under Review for Possible Downgrade
Class A-2, Confirmed at Aaa (sf); previously on May
30, 2013 Aaa (sf) Placed Under Review for Possible Downgrade
Class A-3, Confirmed at Aaa (sf); previously on May
30, 2013 Aaa (sf) Placed Under Review for Possible Downgrade
Issuer: SLM Private Education Loan Trust 2011-B
Class A-1, Confirmed at Aaa (sf); previously on May
30, 2013 Aaa (sf) Placed Under Review for Possible Downgrade
Class A-2, Confirmed at Aaa (sf); previously on May
30, 2013 Aaa (sf) Placed Under Review for Possible Downgrade
Class A-3, Confirmed at Aaa (sf); previously on May
30, 2013 Aaa (sf) Placed Under Review for Possible Downgrade
Issuer: SLM Private Education Loan Trust 2011-C
Class A-1, Confirmed at Aaa (sf); previously on May
30, 2013 Aaa (sf) Placed Under Review for Possible Downgrade
Class A-2A, Confirmed at Aaa (sf); previously on May
30, 2013 Aaa (sf) Placed Under Review for Possible Downgrade
Class A-2B, Confirmed at Aaa (sf); previously on May
30, 2013 Aaa (sf) Placed Under Review for Possible Downgrade
Issuer: SLM Private Education Loan Trust 2012-A
Class A-1, Confirmed at Aaa (sf); previously on May
30, 2013 Aaa (sf) Placed Under Review for Possible Downgrade
Class A-2, Confirmed at Aaa (sf); previously on May
30, 2013 Aaa (sf) Placed Under Review for Possible Downgrade
Issuer: SLM Private Education Loan Trust 2012-B
Cl. A-1, Confirmed at Aaa (sf); previously on
May 30, 2013 Aaa (sf) Placed Under Review for Possible Downgrade
Cl. A-2, Confirmed at Aaa (sf); previously on
May 30, 2013 Aaa (sf) Placed Under Review for Possible Downgrade
Cl. A-3, Confirmed at Aaa (sf); previously on
May 30, 2013 Aaa (sf) Placed Under Review for Possible Downgrade
Issuer: SLM Private Education Loan Trust 2012-C
Class A-1, Confirmed at Aaa (sf); previously on May
30, 2013 Aaa (sf) Placed Under Review for Possible Downgrade
Class A-2, Confirmed at Aaa (sf); previously on May
30, 2013 Aaa (sf) Placed Under Review for Possible Downgrade
Issuer: SLM Private Education Loan Trust 2012-D
Class A-1, Confirmed at Aaa (sf); previously on May
30, 2013 Aaa (sf) Placed Under Review for Possible Downgrade
Class A-2, Confirmed at Aaa (sf); previously on May
30, 2013 Aaa (sf) Placed Under Review for Possible Downgrade
Issuer: SLM Private Education Loan Trust 2012-E
Class A-1, Confirmed at Aaa (sf); previously on May
30, 2013 Aaa (sf) Placed Under Review for Possible Downgrade
Class A-2A, Confirmed at Aaa (sf); previously on May
30, 2013 Aaa (sf) Placed Under Review for Possible Downgrade
Class A-2B, Confirmed at Aaa (sf); previously on May
30, 2013 Aaa (sf) Placed Under Review for Possible Downgrade
Issuer: SLM Private Education Loan Trust 2013-A
Class A-1, Confirmed at Aaa (sf); previously on May
30, 2013 Aaa (sf) Placed Under Review for Possible Downgrade
Class A-2A, Confirmed at Aaa (sf); previously on May
30, 2013 Aaa (sf) Placed Under Review for Possible Downgrade
Class A-2B, Confirmed at Aaa (sf); previously on May
30, 2013 Aaa (sf) Placed Under Review for Possible Downgrade
REGULATORY DISCLOSURES
Moody's did not receive or take into account a third party assessment
on the due diligence performed regarding the underlying assets or financial
instruments related to the monitoring of these transactions in the past
six months.
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.
JingJing Dang
Vice President - Senior 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
John Park
MD – Structure Finance
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 takes various actions on 71 classes of notes from 24 Sallie Mae private student loan securitizations