Fitch Affirms SLM Student Loan Trust 2012-7 Notes; Outlook Stable

NEW YORK--()--Fitch Ratings affirms all outstanding notes issued from SLM Student Loan Trust 2012-7 (SLM 2012-7) at their current rating level and maintains the Stable Outlook. A detailed list of rating actions follows at the end of this press release.

KEY RATING DRIVERS

High Collateral Quality: The trust collateral consists of 100% a Federal Family Education Loan Program (FFELP) loans. The credit quality of the trust 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 Stable Outlook on the notes is consistent with Fitch's affirmation of the U.S. sovereign rating at 'AAA', Outlook Stable.

Sufficient Credit Enhancement (CE): Transaction credit enhancement is provided by overcollateralization (OC) and excess spread. In addition, the class A notes benefits from subordination from the class B notes. As of August 2014, senior and total parity is at 104.84% and 101.01%, respectively. The trust has been releasing excess spread given that the specified OC amount of the greater of 1.00% of the adjusted pool balance or $1.3 million is maintained.

Adequate Liquidity Support: Liquidity support is provided by a reserve account sized at the greater of 0.25% of the pool balance and approximately $1.25 million. As of August 2014, reserve account balance is approximately $2.59 million.

Acceptable Servicing Capabilities: Day-to-day servicing is provided by Navient Solutions Inc., which has demonstrated satisfactory servicing capabilities.

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 taken the following rating actions:

SLM Student Loan Trust 2012-7:

--Class A-1 affirmed at 'AAAsf'; Outlook Stable;

--Class A-2 affirmed at 'AAAsf'; Outlook Stable;

--Class A-3 affirmed at 'AAAsf'; Outlook Stable;

--Class B affirmed at 'A+sf'; Outlook Stable.

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

Applicable Criteria and Related Research:

--'Global Structured Finance Rating Criteria' (August 2014);

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

--Representations, Warranties, and Enforcement Mechanisms in Global Structured Finance Transactions' (April 2014) ;

--'SLM Student Loan Trust 2012-7' (October 2012).

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

Representations, Warranties, and Enforcement Mechanisms in Global Structured Finance Transactions
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=676496

SLM Student Loan Trust 2012-7
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=693662

Additional Disclosure

Solicitation Status
http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=888934

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Contacts

Fitch Ratings
Primary Analyst
Charlene M. Davis, +1-212-908-0213
Director
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Committee Chairperson
Tracy Wan, +1-212-908-9171
Senior Director
or
Media Relations, New York
Sandro Scenga, +1-212-908-0278
sandro.scenga@fitchratings.com

Contacts

Fitch Ratings
Primary Analyst
Charlene M. Davis, +1-212-908-0213
Director
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Committee Chairperson
Tracy Wan, +1-212-908-9171
Senior Director
or
Media Relations, New York
Sandro Scenga, +1-212-908-0278
sandro.scenga@fitchratings.com