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Fitch Affirms SLM 2013-3 Senior Notes & Upgrades Subs; Outlook Stable
[May 12, 2015]

Fitch Affirms SLM 2013-3 Senior Notes & Upgrades Subs; Outlook Stable


Fitch Ratings affirms the SLM Student Loan Trust 2013-3 senior notes at 'AAAsf' and upgrades the subordinate notes to 'AAsf' from 'A+sf'. The Rating Outlook remains Stable for both notes.

The upgrade of the subordinate notes is driven by strong static pool performance and amortization of the bonds. Further, the trust has reached and is expected to maintain its target credit enhancement.

KEY RATING DRIVERS

High Collateral Quality: The trust collateral is comprised of 100% of Federal Family Education Loan Program (FFELP) loans. The credit quality of the trust collateral is high, in Fitch's opinion, based on the guarantees provided by the transaction's eligible guarantors and reinsurance provided by the U.S. Department of Education (ED) for at least 97% of principal and accrued interest. Fitch rates the U.S. sovereign government 'AAA' with a Stable Outlook.

Sufficient Credit Enhancement (CE): CE is provided by overcollateralization (OC; the excess of trust's asset balance over bond balance) and excess spread, and for the senior notes, subordination of the class B notes. As of March 2015, total parity is 101.01% (1.00% CE) and senior parity is 104.66% (4.45% CE). The trust has been and will continue releasing cash given it maintains the specified OC amount equal to the greater of 1% of the adjusted pool balance and $2,000,000.

Adequate Liquidity Support: Liquidity support is provided by a debt service reserve fund equal to the greater of 0.25% of the pool balance and $1,249,991, currently sized at $2,531,370.10.

Acceptable Servicing Capabilities: Day-to-day servicing is provided by Navient Solutions, Inc. (formerly known as Sallie Mae, Inc.). Fitch believes Navient to be an acceptable servicer of FFELP student loans.

RATING SENSITIVITIES

Since the FFELP student loan ABS (News - Alert) relies on the U.S. government to reimburse defaults, 'AAAsf' FFELP ABS ratings will likely move in tandem with the 'AAA' U.S. sovereign rating. Aside from the U.S. sovereign rating, defaults and basis risk account for the majority of the risk embedded in FFELP student loan transactions. Additional defaults and basis shock beyond Fitch's published stresses could result in future downgrades. Likewise, a buildup of credit enhancement driven by positive excess spread given favorable basis factor conditions could lead to future upgrades.

Fitch has taken the following rating actions:

SLM Student Loan Trust 2013-3:

--Class A-1 notes affirmed at 'AAAsf'; Outlook Stable;

--Class A-2 notes affirmed at 'AAAsf'; Outlook Stable;

--Class A-3 notes affired at 'AAAsf'; Outlook Stable;



--Class B notes upgraded to 'AAsf' from 'A+sf'; Outlook Stable.

Additional information is available at 'www.fitchratings.com'.


Applicable Criteria and Related Research:

--'Global Structured Finance Rating Criteria,' (March 31, 2015);

--'Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria' (June 23, 2014);

--'SLM Student Loan Trust 2013-3 - Appendix' (June 10, 2013);

--'Representations, Warranties, and Enforcement Mechanisms in Global Structured Finance Transactions' (March 26, 2015).

Applicable Criteria and Related Research:

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=864268

Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=750530

SLM Student Loan Trust 2013-3 -- Appendix

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=709984

Representations, Warranties and Enforcement Mechanisms in Global Structured Finance Transactions

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=863817

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=984521

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 (News - Alert) 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.


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