OREANDA-NEWS. Fitch Ratings has taken the following rating actions on SLM Student Loan Trust 2007-4:

--Class A-4A affirmed at 'AAAsf'; Rating outlook Stable;
--Class A-4B affirmed at 'AAAsf'; Rating outlook Stable;
--Class A-5 'AAAsf'; Rating Watch Negative maintained;
--Class B-1 affirmed at 'Asf'; Rating outlook Stable
--Class B-2A affirmed at 'Asf'; Rating outlook Stable
--Class B-2B affirmed at 'Asf'; Rating outlook Stable

KEY RATING DRIVERS

Maturity Risk: The Rating Watch Negative action is based on the heightened risk of the class A-5 notes missing its legal final maturity dates of Jan. 27, 2042 which would result in an event of default. In an event of such technical default, Fitch would expect ultimate repayment of full principal and interest after the legal final. The magnitude of the rating action could vary depending on remaining time to maturity, recent payment trends, issuer actions such as loan purchases, or other external factors. Absent any issuer actions, structural or other mitigants, it is possible that 'AAA' ratings could be downgraded one to two rating categories.

High Collateral Quality: The trust collateral consists of 100% of Federal Family Education Loan Program (FFELP) loans. The credit quality of the trust collateral is high, in Fitch's opinion, based on the guarantees provided by the transaction's eligible guarantors and reinsurance provided by the U.S. Department of Education (ED) for at least 97% of principal and accrued interest. The current U.S. sovereign rating is 'AAA' with a Stable Outlook.

Sufficient Credit Enhancement: While both the senior and subordinate notes will benefit from future excess spread, the senior notes also benefit from subordination provided by the class B notes. As of December 2015, total parity is 100.00% and senior parity is 104.46%. Cash is being released from the trust given that the 100% total parity is maintained.

Adequate Liquidity Support: Liquidity support is provided by a reserve account. The reserve is sized equal to the greater of 0.25% of the pool balance, and $ 7,500,000.

Acceptable Servicing Capabilities: Navient Solutions, Inc. (formerly known as Sallie Mae, Inc.), as servicer, will be responsible for servicing the portfolio. Fitch believes that Navient Solutions is an acceptable servicer of FFELP student loans.

On Nov. 18, 2015, Fitch released its exposure draft which delineates revisions it plans to make to the 'Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria', dated June 23, 2014. Fitch has reviewed this transaction under both the existing and proposed criteria.

RATING SENSITIVITIES

Since FFELP student loan ABS rely on the U.S. government to reimburse defaults, 'AAAsf' FFELP ABS ratings will likely move in tandem with the 'AAA' U.S. sovereign rating. Aside from the U.S. sovereign rating, defaults and basis risk account for the majority of the risk embedded in FFELP student loan transactions. Additional defaults and basis shock beyond Fitch's published stresses could result in future downgrades. Likewise, a buildup of credit enhancement driven by positive excess spread given favorable basis factor conditions could lead to future upgrades.