Fitch Affirms SLM Private Credit Student Loan Trust 2003-B; Outlook Stable

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings affirms all ratings of the outstanding student loan notes issued by SLM Private Credit Student Loan Trust 2003-B (SLM 2003-B) as follows:

--Class A-2 at 'A-sf'; Revised to Outlook Stable from Negative;

--Class A-3 at 'A-sf'; Revised to Outlook Stable from Negative;

--Class A-4 at 'A-sf'; Revised to Outlook Stable from Negative;

--Class B at 'BBsf'; Revised to Outlook Stable from Negative;

--Class C at 'CCCsf'; Recovery Estimate (RE) revised to 30% from 15%.

The Rating Outlook for class A and class B bonds has been revised to Stable from Negative based upon the stabilized performance, and improved outlook based on Fitch's projection of the trust's future performance.

KEY RATING DRIVERS

Adequate Collateral Quality: The trust is collateralized by approximately $335.8 million of private student loans originated by Navient Corp. under the Signature Education Loan Program, LAWLOANS program, MBA Loans program, and MEDLOANS program. The projected remaining defaults are expected to range between 8%-11% as of current principal balance. A recovery rate of 13% was assumed in Fitch's cash flow analysis.

Sufficient Credit Enhancement (CE): CE is provided by excess spread, and the senior class A and class B notes benefit from subordination provided by the junior notes. As of the June 15, 2016 distribution, the senior, subordinate and total parity ratios are 118.74%, 112.30%, and 94.93%, respectively, compared to 118.58%, 111.54%, and 96.02% for the same time last year.

Adequate Liquidity Support: Liquidity support is provided by a reserve account sized at approximately $3.12 million.

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

Under Fitch's 'Counterparty Criteria for Structured Finance and Covered Bonds', dated June 18, 2016, Fitch looks to its own ratings in analysing counterparty risk and assessing a counterparty's creditworthiness. The definition of permitted investments for this deal allows for the possibility of using investments not rated by Fitch, which represents a criteria variation. Fitch doesn't believe such variation has a measurable impact upon the ratings assigned.

Under Fitch's 'Counterparty Criteria for Structured Finance and Covered Bonds', dated July 18, 2016, the transaction's swap documents do not address the replacement of the swap counterparty when the counterparty rating is downgraded below 'BBB+' or 'F2', which represents a criteria variation. Given the transaction's basis risk swaps, Fitch considers the counterparty exposure to be immaterial; therefore, Fitch doesn't believe it has a measurable impact on the ratings assigned.

RATING SENSITIVITIES

As Fitch's base case default proxy is derived primarily from historical collateral performance, actual performance may differ from the expected performance, resulting in higher loss levels than the base case. This will result in a decline in CE and remaining loss coverage levels available to the notes and may make certain note ratings susceptible to potential negative rating actions, depending on the extent of the decline in coverage. Fitch will continue to monitor the performance of the trust.

DUE DILIGENCE USAGE

No third party due diligence was provided or reviewed in relation to this rating action.

Additional information is available at www.fitchratings.com.

Applicable Criteria

Counterparty Criteria for Structured Finance and Covered Bonds (pub. 18 Jul 2016)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=884963

Counterparty Criteria for Structured Finance and Covered Bonds: Derivative Addendum (pub. 18 Jul 2016)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=884964

Criteria for Interest Rate Stresses in Structured Finance Transactions and Covered Bonds (pub. 17 May 2016)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=879815

Criteria for Servicing Continuity Risk in Structured Finance (pub. 17 Dec 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=875586

Global Structured Finance Rating Criteria (pub. 27 Jun 2016)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=883130

U.S. Private Student Loan ABS Criteria (pub. 31 Jul 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=868836

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=1010161

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=1010161

Endorsement Policy

https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31

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.

View source version on businesswire.com: http://www.businesswire.com/news/home/20160809006496/en/

Fitch Ratings
Primary Analyst:
Jeffrey Prackup
Director
+1-212-908-0839
Fitch Ratings, Inc.
33 Whitehall St.
New York, NY 10004
or
Committee Chairperson:
Tracy Wan
Senior Director
+1-212-908-91171
or
Media Relations:
Sandro Scenga, New York, +1 212-908-0278
[email protected]

Source: Fitch Ratings

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