Moody's Investors Service has placed the 'Baa2' senior unsecured rating and 'Prime-2' short-term rating of SLM Corp. under review for possible downgrade following the companys announcement that it has amended its ABCP facility in order to reduce the commitment amounts for both FFELP loans and private education loans.
"Private education loans are an increasingly important profit engine for the company, and a reduction in the ability to originate and fund these loans could be problematic," Moodys said.
That rating agency said that in its review it will also take into account SLMs funding plans for both private education loans and FFELP loans, including the company's ability to access term funding markets for ABS and potentially unsecured debt. Moody's will also evaluate SLM's plan for achieving compliance with the terms and conditions of the FDIC's Cease and Desist Order relating to compliance management and certain co-branded marketing practices at Sallie Mae Bank, the rating agency said.
