NEW YORK, Feb 14 (Reuters) - Rating agency Standard & Poor’s on Thursday revised SLM Corp’s outlook to negative from stable on worries about the potential for future reductions in cash flows.
S&P also affirmed SLM’s BBB-minus rating.
While a recent sale of residual interests in the SLM Student Loan Trust securitization 2007-4 was modest, “we believe this represents a shift in the company’s strategy related to its Federal Family Education Loan Program (FFELP) portfolio,” the ratings agency said in a statement.
“The negative outlook reflects our belief that SLM could undertake additional similar transactions, which would reduce future cash flows from the company’s FFELP portfolio.”
On Wednedsay, SLM Corp, better known as Sallie Mae, said it had sold the residual interest in its SLM Student Loan Trust 2007-4 securitization to a third party.
The gain from the transaction would add 8 cents to Sallie Mae’s 2013 GAAP and core earnings per share, the company said.
“We believe yesterday’s transaction was positive for the company, and we will continue to work closely with S&P as well as the other ratings agencies so they completely understand our strategy,” Patricia Nash Christel, a spokeswoman for SLM Corp, told Reuters late on Thursday.