S&P: SLM ratings might get downgrade |
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Thu, 11 Oct 2007 23:21
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NEW YORK (AP) - Standard & Poor's Ratings Services said Thursday it will keep Sallie Mae's parent company on credit watch with negative implications due to the expiration of an investor group's buyout offer.SLM Corp.'s investment-grade 'BBB+/A-2' counterparty credit ratings were initially placed on credit watch in April.The buyout group, led by private equity firm J.C. Flowers & Co., reduced its offer to $21 billion, or $50 per share, from its original offer of $25 billion, or $60 per share, last month. The group said economic conditions and recently signed legislation no longer make the student-loan company as valuable.Even if the transaction occurs under the original agreement, Sallie Mae's ratings would fall below investment grade due to the 'sheer amount of debt that will have to be serviced,' S&P credit analyst Ernest Napier said in a statement.If the group completed the buyout on modified terms, with reduced debt, it might have positive ratings implications, but its rating is 'still likely to be noninvestment grade,' Napier added.SLM shares fell 29 cents to $48.47 in afterhours trading after rising 13 cents to close at $48.76.Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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Journal Register cut to 'B+' with negative outlook - S&P 