Fitch Ratings has affirmed the senior and subordinate student loan notes issued by SLM Student Loan Trust 2005-1 at 'AAAsf' and 'AAsf', respectively. The Negative Outlook is maintained on the senior notes and a Positive Outlook is assigned to the subordinate notes. A full ratings list is shown below.
Fitch affirms the ratings on the notes based on the sufficient level of credit enhancement to cover the applicable risk factor stresses. Credit enhancement for the senior and subordinate notes consists of overcollateralization and projected minimum excess spread, while the senior notes also benefit from subordination provided by the class B notes.
The Negative Outlook is maintained on the senior notes due to the Negative Outlook assigned to the sovereign rating of the U.S. government. The subordinate note is assigned a Positive Outlook due to increasing parity and the trust's ability to continue to generate positive excess. This transaction is structured to exclude the reserve account from the parity calculation once the pool factor falls below 40%. However, Fitch gives credit to the funds in the reserve account when conducting this analysis.
The current pool factor is 12.25% and the balance in the reserve account is at the floor of $1,525,348. As the notes pay down and the reserve account is funding at the floor level, the total parity calculated for use in Fitch's analysis will continue to increase. In addition, once the trust reaches a pool factor of 10% the trust will enter turbo mode, during which excess cash generated by the trust is used to pay down the notes rather than being released to the issuer.
Fitch used its 'Global Structured Finance Rating Criteria' and 'Rating U.S. Federal Family Education Loan Program Student Loan ABS' to review the ratings.
Fitch has affirmed the following ratings:
SLM Student Loan Trust 2005-1:
--A-2 at 'AAAsf'; Outlook Negative;
--B at 'AAsf'; Outlook revised to Positive from Stable.
Additional information is available at 'www.fitchratings.com'. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.
Applicable Criteria and Related Research:
--'Global Structured Finance Rating Criteria' (June 6, 2012);
--'Rating U.S. Federal Family Education Loan Program Student Loan ABS' (April 3, 2012).
Applicable Criteria and Related Research:
Global Structured Finance Rating Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=679923
Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=675202
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