Sallie Mae 2006 Annual Report Download - page 158

9. Student Loan Securitization (Continued)
servicing, derivative costs (if any), other fees, and the principal and interest on the bonds backed by the
student loans. The investors of the securitization trusts have no recourse to the Company’s other assets should
there be a failure of the student loans to pay when due.
The following table summarizes the Company’s securitization activity for the years ended December 31,
2006, 2005 and 2004. Those securitizations listed as sales are off-balance sheet transactions and those listed as
financings remain on balance sheet.
(Dollars in millions)
No. of
Transactions
Loan
Amount
Securitized
Pre-Tax
Gain
Gain
%
No. of
Transactions
Loan
Amount
Securitized
Pre-Tax
Gain
Gain
%
No. of
Transactions
Loan
Amount
Securitized
Pre-Tax
Gain
Gain
%
2006 2005 2004
Years Ended December 31,
Securitizations —
sales:
FFELP Stafford and
Other Student
Loans . . ........ 2 $ 5,004 $ 17 .3% 3 $ 6,533 $ 68 1.1% 4 $10,002 $134 1.3%
FFELP Consolidation
Loans . . ........ 4 9,503 55 .6 2 4,011 31 .8 — — — —
Private Education
Loans . . ........ 3 5,088 830 16.3 2 3,005 453 15.1 2 2,535 241 9.5
Total securitizations —
sales. . . ........ 9 19,595 $902 4.6% 7 13,549 $552 4.1% 6 12,537 $375 3.0%
Securitizations —
financings:
Asset-backed
commercial
paper
(1)
......... — — — — 1 4,186
FFELP Consolidation
Loans
(2)
........ 4 12,506 5 12,503 6 17,124
Total securitizations —
financings ....... 4 12,506 5 12,503 7 21,310
Total securitizations . . 13 $32,101 12 $26,052 13 $33,847
(1)
The Company’s asset backed commercial paper program is a revolving multi-seller conduit that allows the Company to borrow up to
$6 billion subject to annual extensions. The Company may purchase loans out of this trust at its discretion and as a result, the trust
does not qualify as a QSPE and is accounted for on balance sheet as a VIE.
(2)
In certain FFELP Consolidation Loan securitization structures, there are certain terms within the deal structure that result in such
securitizations not qualifying for sale treatment and accordingly, they are accounted for on-balance sheet as variable entities (“VIEs”).
The terms that are present within these structures that prevent sale treatment are: (1) the Company may hold certain rights that can
affect the remarketing of certain bonds, (2) the trust may enter into interest rate cap agreements after initial settlement of the securiti-
zation which do not relate to the reissuance of third party beneficial interests and (3) the Company may hold an unconditional call
option related to a certain percentage of the securitized assets.
F-39
SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts, unless otherwise stated)