S&P drops SLM

Standard & Poor's said it has lowered the counterparty credit ratings of SLM Corp. (Sallie Mae) to BBB+/A-2 from A/A-1.

All ratings remain on CreditWatch with negative implications, where they were placed on April, 16, the agency said.

S&P noted that the decision to lower the company's ratings follows the release of additional information in the proxy concerning the financing of the merger agreement with an investor group led by J.C. Flowers & Co., which includes JPMorgan Chase Bank NA and Bank of America NA.

S&P said it believes that when this transaction is completed, financial risks for all classes of existing debt-holders will be greatly increased.

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