Boston, MA 05/14/2014 (wallstreetpr) – Navient Corp. (NASDAQ:NAVI) is a leading name in the areas of consulting, marketing, sales, telemarketing and IT. Recently the company got a ‘BB’ rating from a leading rating agency Fitch Ratings. According to the reports, the rating outlook seems stable. Recently the SLM Corp.’s outstanding shares were transferred to NAVI, thus Fitch transferred SLM’s senior unsecured debt ratings to the NAVI.
At the same time, this leading rating agency has downgraded the ratings of SLM’s long terms IDR from BB+ to BB, according to the reports. As all the investors know that the SLM Corp. has got separated from NAVI, so the SLM Corp’s $18.3 billion worth of public unsecured debt will be taken care by the NAVI, but the present existing preferred stock of $565 million worth will remain an obligation for the SLM Corp.
Rating Drivers:
The main reason for getting stable rating and future outlook from Fitch is nothing but the low risk business and highly predictable cash flow in the business line of NAVI. The company’s fees based business and student loan assets played a vital role for the company to get a decent ranking. While rating to Navient Corp. (NASDAQ:NAVI), the Fitch took into consideration long term strategic planning, business diversification, market position, capital and liquidity levels.
According to analysts of Fitch, the future cash flow of NAVI will be sufficient to meet all the unsecured debt obligations. But at the same time the rating agency believes that the NAVI’s ability to return unsecured future obligations might create pressure on company’s management if the market gives below expectations return.
Recently the management of Navient Corp. (NASDAQ:NAVI) has given sign of increasing future cash flow from the run-off student loan portfolio activities, while at the same time diversifying its business to reduce the business risk. It will be interesting to see as how the management of the company implements ideas which are on papers in real life scenarios.
