Fitch Ratings expects to rate
Proceeds from the issuance are expected to be used for general corporate purposes, including the repayment of outstanding unsecured debt.
Key Rating Drivers
The unsecured debt is expected to rank pari passu with
Fitch does not expect the debt issuance to have a meaningful impact on the company's leverage profile as proceeds are expected to refinance upcoming unsecured debt maturities.
Rating constraints include
Rating Sensitivities
Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade
An increase in
A decrease in the unsecured debt mix representing less than 10% of the company's non-FFELP funding;
Significant deterioration in credit performance of its private student loan portfolio leading to materially weaker operating results;
An increase in shareholder distributions above
An adverse outcome in the pending
Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade
Sustainable growth in core earnings from successful execution on new loan originations and business processing segment revenues;
Strong credit performance on the private education loan refi portfolio through periods of economic stress;
A meaningful reduction in leverage below 8.0x;
A demonstrated ability to access the unsecured debt market on economic terms.
DEBT AND OTHER INSTRUMENT RATINGS: KEY RATING DRIVERS
The equalization of the unsecured debt rating with
DEBT AND OTHER INSTRUMENT RATINGS: RATING SENSITIVITIES
The expected unsecured debt rating is equalized with the long-term IDR and is expected to move in tandem. However, a meaningful increase in the proportion of secured funding or reduction of the unencumbered asset pool could result in the unsecured debt rating being notched down below the IDR.
Best/Worst Case Rating Scenario
International scale credit ratings of Financial Institutions and Covered Bond issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from '
Date of Relevant Committee
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING
The principal sources of information used in the analysis are described in the Applicable Criteria.
ESG Considerations
Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. For more information on Fitch's ESG Relevance Scores, visit www.fitchratings.com/esg
(C) 2023 Electronic News Publishing, source