NEW YORK--(BUSINESS WIRE)--Fitch Ratings has affirmed the senior note at 'AAAsf' and the subordinate student loan note at 'A+sf' issued by SLM Student Loan Trust 2012-3. The Rating Outlook on the senior notes, which is tied to the sovereign rating of the U.S. government, remains Negative, while the Rating Outlook on the subordinate note remains Stable. Fitch used its 'Global Structured Finance Rating Criteria', and 'Rating U.S. Federal Family Education Loan Program Student Loan ABS' to review the ratings.
KEY RATING DRIVERS
The ratings on the senior and subordinate notes are affirmed based on the sufficient level of credit 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 note.
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 affirmed the following ratings:
SLM Student Loan Trust 2012-3:
--Class A at 'AAAsf'; Outlook Negative;
--Class B at 'A+sf'; Outlook 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.
A comparison of the transaction's RW&E to those of typical RW&E for student loans is available by accessing the reports below.
Applicable Criteria and Related Research:
--'Global Structured Finance Rating Criteria' (June 6, 2012);
--'Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria' (April 3, 2012);
--'SLM Student Loan Trust 2012-3 (US ABS) Presale Report' (April 23, 2012);
--'SLM Student Loan Trust 2012-3 -- Appendix' (April 24, 2012);
--'Representations, Warranties, and Enforcement Mechanisms in Global Structure Finance Transactions-- Amended'(April 17, 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=704322
SLM Student Loan Trust 2012-3 (US ABS)
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=677451
SLM Student Loan Trust 2012-3 - Appendix
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=677549
Representations, Warranties, and Enforcement Mechanisms in Global Structured Finance Transactions -- Amended
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=676496
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