NEW YORK--(BUSINESS WIRE)--Fitch Ratings affirms the seniors notes issued by SLM Student Loan Trust 2005-3, SLM Student Loan Trust 2005-4, and SLM Student Loan Trust 2005-5 at 'AAAsf' and affirms the subordinate notes issued by these trusts at 'Asf'. The Rating Outlook remains Stable on all notes.
A full list of rating actions follows at the end of this press release.
KEY RATING DRIVERS
High Collateral Quality: The trusts' collateral are comprised 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. Fitch currently rates the U.S. sovereign at 'AAA' with a Stable Outlook.
Sufficient Credit Enhancement (CE): CE is provided by excess spread and for the class A notes, subordination of the class B notes. As of June 2015, total and senior parity ratios are 100% and 104.22% (4.05% CE) for SLM 2005-3; 100% and 104.68% (4.47% CE) for SLM 2005-4; 100% and 105.02% (4.78% CE) for SLM 2005-5. Cash will continue to be released from all three trusts as long as the 100% target parity ratio is maintained.
Adequate Liquidity Support: Liquidity support is provided by reserve accounts sized at their floors of $2,260,922, $3,773,732, and $3,353,244 for the SLM 2005-3, SLM 2005-4, and SLM 2005-5 trusts, respectively.
Acceptable Servicing Capabilities: Day to day servicing is provided by Navient Solutions, Inc. (formerly known as Sallie Mae, Inc.), In Fitch's opinion, Navient is an 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 that favorable basis factor conditions could lead to future upgrades.
DUE DILIGENCE USAGE
No third party due diligence was provided or reviewed in relation to this rating action.
Fitch has affirmed the following ratings:
SLM Student Loan Trust 2005-3:
--Class A-5 notes at 'AAAsf'; Outlook Stable;
--Class A-6 notes at 'AAAsf'; Outlook Stable;
--Class B-1 notes at 'Asf'; Outlook Stable.
SLM Student Loan Trust 2005-4:
--Class A-3 notes at 'AAAsf'; Outlook Stable;
--Class A-4 notes at 'AAAsf'; Outlook Stable;
--Class B notes at 'Asf'; Outlook Stable.
SLM Student Loan Trust 2005-5:
--Class A-3 notes at 'AAAsf'; Outlook Stable;
--Class A-4 notes at 'AAAsf'; Outlook Stable;
--Class A-5 notes at 'AAAsf'; Outlook Stable;
--Class B notes at 'Asf'; Outlook Stable.
Additional information is available at www.fitchratings.com.
Applicable Criteria
Global Structured Finance Rating Criteria (pub. 06 Jul 2015)
https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=867952
Rating U.S. Federal Family Education Loan Program Student Loan ABS
Criteria (pub. 23 Jun 2014)
https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=750530
Additional Disclosures
Dodd-Frank Rating Information Disclosure Form
https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=989335
Solicitation Status
https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=989335
Endorsement Policy
https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31
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