NEW YORK--(BUSINESS WIRE)--Fitch Ratings affirms the senior notes rated 'AAAsf' and subordinate notes rated 'Asf' issued by SLM Student Loan Trust 2004-1. The Rating Outlook on all classes remains Stable.
KEY RATING DRIVERS
High Collateral Quality: The trust collateral comprises Federal Family Education Loan Program (FFELP) loans with guaranties provided by eligible guarantors and reinsurance provided by the U.S. Department of Education (ED) for at least 97% of principal and accrued interest. Fitch's current U.S. sovereign rating is 'AAA' with a Stable Outlook.
Sufficient Credit Enhancement: Credit enhancement (CE) is provided by excess spread and, for the class A notes, subordination provided by the class B notes. As of March 2015, total parity is 100.00% and senior parity is 104.52% (4.32% CE). Cash is being released from the trust given that the 100% total parity is maintained.
Adequate Liquidity Support: Liquidity support is provided by a reserve account. The reserve is sized equal to the greater of 0.25% of the pool balance, and $3,007,834.
Acceptable Servicing Capabilities: Navient Solutions, Inc. (FKA Sallie Mae, Inc.) is responsible for the day to day servicing of the student loans. Fitch believes Navient Solutions to be an acceptable servicer of FFELP student loans.
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 CE driven by positive excess spread given 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 2004-1
--Class A-3 at 'AAAsf'; Outlook Stable;
--Class A-4 at 'AAAsf'; Outlook Stable;
--Class A-5 at 'AAAsf'; Outlook Stable;
--Class A-6 at 'AAAsf'; Outlook Stable;
--Class B at 'Asf'; Outlook Stable.
Additional information is available at www.fitchratings.com.
Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria (pub. 23 Jun 2014)
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