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Fitch Affirms SLM Student Loan Trust 2006-1 Sr. and Sub. Notes

NEW YORK–(BUSINESS WIRE)–

Fitch Ratings has affirmed the senior notes SLM Student Loan Trust 2006-1 at ‘AAAsf’ and subordinate note at ‘AA-sf’. The Rating Outlook remains Stable on both notes.

KEY RATING DRIVERS

High Collateral Quality The trust collateral is comprised of 100% of Federal Family Education Loan Program (FFELP) loans. The credit quality of the trust collateral is high, in Fitch’s opinion, based on the guarantees provided by the transaction’s eligible guarantors and at least 97% reinsurance of principal and accrued interest provided by the U.S. Department of Education (ED).

Sufficient Credit Enhancement: Credit enhancement (CE) is provided by overcollateralization (OC; the excess of trust’s asset balance over bond balance), excess spread, and for the class A notes, subordination provided by the class B notes. The trust, below the 40% pool factor threshold, can release cash as long as total parity, not including the reserve account, is 100.00%. The trust has been releasing cash and maintaining this parity level. Including the reserve account, total and senior parities are 100.68% and 126.56% respectively.

Liquidity support: Liquidity support for the series 2006-1 notes is provided by a reserve account (greater of 0.25% of the pool balance and $2,502,266). The reserve fund is sized at the floor of $2,502,266 as of September 2014.

Acceptable Servicing Capabilities: Navient Solutions, Inc. (formerly known as Sallie Mae, Inc.) is the servicer of the trust’s student loan pool. In Fitch’s opinion, Navient Solutions, Inc. is an acceptable servicer of FFELP student loans.

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 affirmed the following ratings:

SLM Student Loan Trust Series 2006-1

–Class A-4 notes at ‘AAAsf’; Outlook Stable;

–Class A-5 notes at ‘AAAsf’; Outlook Stable;

–Class B note at ‘AA-sf’; 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 June 23, 2014.

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

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=945075

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY’S PUBLIC WEBSITE ‘WWW.FITCHRATINGS.COM‘. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH’S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE ‘CODE OF CONDUCT’ SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

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Contact:

Fitch Ratings

Primary Analyst

Lisette Figueroa

+1-212-908-0836

Fitch Ratings, Inc.

33 Whitehall St.

New York, NY 10004

or

Committee Chairperson

Steven Stubbs

Senior Director

+1-212-908-0676

or

Media Relations

Sandro Scenga, +1 212-908-0278

sandro.scenga@fitchratings.com

More here:
Fitch Affirms SLM Student Loan Trust 2006-1 Sr. and Sub. Notes

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