Moody's lowers SLM

Moody's Investors Service said it downgraded SLM Corp.'s senior unsecured long-term debt rating to Baa1 from A2, the preferred stock rating to Baa3 from Baa1 and the commercial paper and other short-term obligations to Prime-2 from Prime-1.

The ratings remain under review for further downgrade pending the outcome of the proposed acquisition of SLM by Mustang Holding Co. Inc.

Moody's said the downgrade reflects its view that SLM's fundamental credit strength had declined given pending legislation and the possibility of a failed acquisition. The current ratings reflect Moody's view of the issuer's profile if the acquisition is not completed, the agency said.

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