Fitch: Navient's Expected Future Cash Flows Offer Degree of Downside Protection

Thu May 22, 2014 11:27am EDT

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(The following statement was released by the rating agency) Link to Fitch Ratings' Report: Cash Flow Analysis of Navient Corporation (Updated Cash Flow Projections Post Separation) here CHICAGO, May 22 (Fitch) Navient Corporation's (Navient) expected cash flows from the runoff portfolio and fee-based businesses would be sufficient to repay $18 billion in existing senior unsecured debt under a single factor stress scenario, according to Fitch Ratings. This according to Fitch's analysis of Navient's (rated 'BB' with a Stable Outlook) $130 billion legacy FFELP and private student loan portfolio. That said, Navient's ability to repay debt in full would come under pressure in a scenario where multiple stress factors are simultaneously applied. Following the strategic separation of Navient from SLM Corporation (SLM) in April, Fitch assigned a new 'BB' IDR to Navient and transferred SLM's senior unsecured debt ratings to Navient at 'BB'. Per the terms of the separation, SLM's existing public unsecured debt was assumed by Navient. Ratings assigned to Navient's outstanding debt reflect continued uncertainty regarding the long-term strategic direction of the company. However, Fitch believes the run-off cash flow analysis provides a degree of downside protection to debt holders. The full report 'Cash Flow Analysis of Navient Corporation' is available at '' or by clicking on the above link. This report updates Fitch's earlier analysis of SLM Corporation published in July 2013. Contact: Brendan Sheehy Director +1-212-908-9138 Fitch Ratings, Inc., 33 Whitehall Street, NY, NY 10004 Media Relations: Alyssa Castelli, New York, Tel: +1 (212) 908 0540, Email: Additional information is available on ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON 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.