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Fitch Affirms SLM Student Loan Trust 2004-5

NEW YORK--(BUSINESS WIRE)--Fitch Ratings affirms the SLM Student Loan Trust, Series 2004-5 (SLM 2004-5) senior notes at 'AAAsf' and the subordinate notes at 'BBBsf'. The Rating Outlook remains Stable for both classes.

KEY RATING DRIVERS

High Collateral Quality: SLM 2004-5 collateral consists of 100% Federal Family Education Loan Program (FFELP) loans. The credit quality of the trusts 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. On March 24, 2014, Fitch affirmed the U.S. sovereign rating at 'AAA' and assigned a Stable Outlook.

Sufficient Credit Enhancement (CE): The SLM 2004-5 notes benefit from overcollateralization (the excess of trust's asset balance over bond balance) and excess spread. The senior class A notes also benefit from the subordination of the class B notes. As of March 2014, reported senior parity is 104.82% and reported total parity is 100.00%. Cash is being released from the trust given that the 100% total parity is maintained. Additionally, the trust is approaching 40% pool factor, at which time, the reserve account balance will be excluded from the parity calculation, resulting in overcollateralization for the trust.

Adequate Liquidity Support: Liquidity support is provided by a reserve fund sized at the greater of 0.25% of the pool balance and $4,455,445.

Acceptable Servicing Capabilities: Navient Solutions, Inc. (formerly known as Sallie Mae, Inc.), as servicer, will be responsible for the day to day servicing of the portfolio. Fitch believes Navient Solutions to be an acceptable servicer of FFELP student loans.

RATING SENSITIVITIES

Since the FFELP student loan ABS relies 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 ratings:

SLM Student Loan Trust, Series 2004-5:

--Class A-4 notes 'AAAsf'; Outlook Stable;

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

--Class A-6 notes 'AAAsf'; Outlook Stable;

--Class B notes 'BBBsf'; Outlook Stable.

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

Applicable Criteria and Related Research:

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

--'Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria' dated May 17, 2013.

Applicable Criteria and Related Research:

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=748821

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

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=708795

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=836530

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Contacts

Fitch Ratings
Primary Analyst
Jeffrey Prackup, +1 212-908-0839
Director
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Secondary Analyst
Paul Jiang, +1 212-908-9120
Analyst
or
Committee Chairperson
Tracy Wan, +1 212-908-9171
Senior Director
or
Media Relations:
Sandro Scenga, +1 212-908-0278
sandro.scenga@fitchratings.com