Fitch Takes Various Rating Actions on SLM Student Loan 2004 Trusts

NEW YORK--()--Fitch Ratings has affirmed the 'AAAsf' ratings for the senior notes issued by SLM Student Loan Trust 2004-6 (SLM 2004-6), SLM Student Loan Trust 2004-7 (SLM 2004-7), and SLM Student Loan Trust 2004-9 (SLM 2004-9).

In addition, Fitch affirms the 'AAAsf' rating on SLM 2004-6 and SLM 2004-7 subordinate notes and upgrades the SLM 2004-9 subordinate notes to 'AAAsf' from 'AA+sf'.

The Rating Outlooks for the SLM 2004-6 and SLM 2004-7 trusts remains Stable. The Outlook for the SLM 2004-9 senior bonds remains Stable, and the Outlook for the subordinate bonds has been revised to Stable from Positive.

KEY RATING DRIVERS

High Collateral Quality: Each of the trusts' collateral consists of 100% of Federal Family Education Loan Program (FFELP) loans. The credit quality of the trust collateral is high, in Fitch's opinion, based on the guarantees provided by the transaction's eligible guarantors and reinsurance provided by the U.S. Department of Education (ED) for at least 97% of principal and accrued interest. The current U.S. sovereign rating is at 'AAA' with a Stable Outlook.

Sufficient Credit Enhancement (CE): The SLM 2004-6 and SLM 2004-7 trusts possess sufficient credit enhancement to affirm the ratings on the senior and subordinate notes. The SLM 2004-9 trust possesses sufficient credit enhancement to affirm the ratings on the senior notes and upgrade the ratings on the subordinate notes to 'AAAsf' from 'AA+sf'. While both the senior and subordinate notes for each trust will benefit from excess spread, the senior notes also benefit from subordination provided by the class B notes. As of June 2014, Navient Solutions has reported that total parity is 102.82% (2.74% CE) and senior parity is 179.89% (44.41% CE) for SLM 2004-6; 102.57% (2.50% CE) and 179.73% (44.36% CE) for SLM 2004-7; and 102.04% (2.00% CE) and 167.05% (40.14% CE) for SLM 2004-9. Cash is not being released from the trusts, as the pool factor for each trust is below 10%, and each trust is currently in turbo.

Adequate Liquidity Support: Liquidity support is provided by a reserve account. The reserve for SLM 2004-6 is sized to equal the greater of 0.25% of the pool balance and $3,000,577 for SLM 2004-7; the reserve is sized to equal the greater of 0.25% of the pool balance and $1,500,060 and for SLM 2004-9; and the reserve is sized to equal the greater of 0.25% of the pool balance and $3,000,049.

Acceptable Servicing Capabilities: Navient Solutions, Inc. (formerly known as Sallie Mae, Inc.), as servicer, will be responsible for servicing all three trusts. Fitch has reviewed the servicing operations of Navient Solutions and believes it to be acceptable servicer of FFELP student loans.

RATING SENSITIVITIES

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.

Fitch has affirmed the following rating:

SLM Student Loan Trust Series 2004-6:

--Class A-5 at 'AAAsf'; Outlook Stable;

--Class B at 'AAAsf'; Outlook Stable;

SLM Student Loan Trust Series 2004-7:

--Class A-5 at 'AAAsf'; Outlook Stable;

--Class B at 'AAAsf'; Outlook Stable;

SLM Student Loan Trust Series 2004-9:

--Class A-5 at 'AAAsf'; Outlook Stable;

--Class B upgraded to 'AAAsf' from 'AA+sf'; and Outlook revised to Stable from Positive.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research:

--'Global Structured Finance Rating Criteria' (May 20, 2014);

--'Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria' (June 23, 2014).

Applicable Criteria and Related Research:

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=754389

Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=750530

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=853915

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

Contacts

Fitch Ratings
Primary Analyst
Jeffrey Prackup, +1 212-908-0839
Director
Fitch Ratings, Inc.
33 Whitehall St.
New York, NY 10004
or
Committee Chairperson
Tracy Wan, +1 212-908-9171
Senior Director
or
Media Relations:
Sandro Scenga, +1 212-908-0278
sandro.scenga@fitchratings.com

Sharing

Contacts

Fitch Ratings
Primary Analyst
Jeffrey Prackup, +1 212-908-0839
Director
Fitch Ratings, Inc.
33 Whitehall St.
New York, NY 10004
or
Committee Chairperson
Tracy Wan, +1 212-908-9171
Senior Director
or
Media Relations:
Sandro Scenga, +1 212-908-0278
sandro.scenga@fitchratings.com