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Student Loan ABS Sector

Student Loan ABS Sector. Moderated by: Linda Stesney, Managing Director. American Securitization Forum January 30, 2006. Our Panelists. Sharon Asch—Director ABN AMRO Inc. John Hupalo—Executive Vice President Group Head, First Marblehead Corp. Leo Subler—Managing Director—Sallie Mae

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Student Loan ABS Sector

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  1. Student Loan ABS Sector Moderated by: Linda Stesney,Managing Director American Securitization Forum January 30, 2006

  2. Our Panelists • Sharon Asch—Director ABN AMRO Inc. • John Hupalo—Executive Vice President Group Head, First Marblehead Corp. • Leo Subler—Managing Director—Sallie Mae • Amy Vespasiano, Director—Lloyds TSB Bank • Linda Stesney—Managing Director, Moody’s Investors Service

  3. Our Goals • Summarize 2005 Issuance and 2006 Outlook • Review Impact of Deficit Reduction Act of 2005 on Student Loan ABS • Perspective on Private SLABS • Credit and Cash Flow Analysis on Private SLABS

  4. 2005 Highlights • Record Issuance--$73.3 Billion • FFELP Consolidation Loans Dominated--$38 Billion • Private Loan Securitized Volume--$9.4 Billion • Deficit Reduction Act of 2005

  5. Student Loan ABS Issuance

  6. 2005 Private Loan Volumes

  7. Consolidation Loan Volume

  8. Deficit Reduction Act of 2005—Key Proposals • Reduce government guarantee • (from 98% to 97%; from 100% for Exceptional Performers to 99%) • Stafford and Plus Loans go fixed rate (6.8% and 8.5%, respectively)—SAP continues to float • “Floor Income” rebated back to government • =excess of borrower rate over quarterly SAP

  9. Deficit Reduction Act of 2005—Key Proposals (cont’d) • Eliminates in-school consolidation and virtually eliminates two-step consolidations • PLUS loans available to grad and professional students • Loan limits increased on Staffords • Recycling of 9.5% loans virtually eliminated

  10. Know Your Audience • Q1: Which category best describes you role in student loan ABS? • Investor • Intermediary • Issuer • Other

  11. Know Your Audience (cont’d) • Q2 Describe your exposure to student loans— • I am considering investing in student loans and want to learn more about the product • I already invest in student loans but want to deepen my understanding of: • A. FFELP Loans • B. Private Loans --Student loans make up a significant portion of my portfolio

  12. Q3 Audience Follow-Up • In 2006 do you expect to allocate more investment dollars to Student Loan ABS? • I will increase holdings in FFELP ASB • I will increase holdings in private loan ABS • I expect to decrease holdings in FFELP ABS • I expect to decrease holdings in private loan ABS • I expect to maintain the same allocation

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