Moody's confirms Sallie Mae

Moody's Investors Service said it confirmed the ratings of SLM Corp. (senior unsecured Baa2, short-term Prime-2) and assigned a negative outlook.

The action concludes Moody's ratings review of Sallie Mae that it initiated on Aug. 28.

The rating confirmation reflects Moody's opinion that SLM's liquidity and funding profile remain satisfactory despite the $6 billion reduction in SLM's ABCP commitments announced by the company on Aug. 28.

According to the agency, SLM's liquidity and financial flexibility benefit from the Department of Education's funding program announced in May and implemented beginning in August, which provides certainty of funding for new FFELP loan originations through academic year 2009-2010; the deposit taking capabilities of Sallie Mae Bank; and cash flow generation principally from earnings and unencumbered loan collections.

The ratings confirmation also reflects SLM's strong franchise in the student lending industry; improved corporate governance as reflected in a strengthened senior management team, board, and corporate commitment to risk management; improved core earnings visibility aided by the DOE funding program; and an ongoing expense reduction program, the agency noted.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.