Exhibit 1.2
Pricing Agreement
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March 16, 2004
J.P. Morgan Securities Inc.
270 Park Avenue
10th Floor
New York, New York 10017
Merrill Lynch, Pierce, Fenner & Smith Incorporated
4 WFCN, 10th Floor
New York, New York 10080
Ladies and Gentlemen:
SLM Education Credit Funding LLC, a Delaware limited liability company
(the "Company"), and SLM Education Credit Finance Corporation, a Delaware
corporation, formerly known as SLM Education Credit Management Corporation ("SLM
Education Credit"), propose, subject to the terms and conditions stated in this
letter agreement and in the Underwriting Agreement, dated March 16, 2004 (the
"Underwriting Agreement"), between the Company and SLM Education Credit, on the
one hand, and J.P. Morgan Securities Inc. and Merrill Lynch, Pierce, Fenner &
Smith Incorporated (the "Underwriters"), on the other hand, and subject to the
Company having formed the trust (the "Trust") pursuant to the trust agreement,
dated as of March 1, 2004, between the Company and Chase Manhattan Bank USA,
National Association, as trustee (the "Trustee"), which trust agreement will be
amended and restated by an Amended and Restated Trust Agreement, dated as of the
Time of Delivery among the Company, the Trustee and JPMorgan Chase Bank (the
"Indenture Trustee"), to issue and sell to the Underwriters the Student
Loan-Backed Notes (the "Notes") specified in Schedule II hereto (the "Designated
Securities"). The Notes will be issued and secured pursuant to the Indenture,
dated as of March 1, 2004, between the Trust and the Indenture Trustee. Unless
otherwise defined in this letter agreement, terms defined in the Underwriting
Agreement are used in this letter agreement.
Except as modified pursuant to Schedule II hereto, each of the
provisions of the Underwriting Agreement is incorporated in this letter
agreement by reference in its entirety, and shall be deemed to be a part of this
Agreement to the same extent as if such provisions had been set forth in full in
this letter agreement; and each of the representations and warranties set forth
in this letter agreement shall be deemed to have been made at and as of the date
of this letter agreement, except that each representation and warranty in
Section 2 of the Underwriting Agreement which refers to the Prospectus shall be
deemed to be a representation or warranty in relation to the Prospectus, as of
the date of the Underwriting Agreement, and also a representation and warranty
in relation to the Prospectus as amended or supplemented relating to the
Designated Securities which are the subject of this letter agreement, as of the
date of this letter agreement. Each reference to the Representatives in this
letter agreement and in the provisions of the Underwriting Agreement so
incorporated by reference shall be deemed to refer to you.
The Representative designated to act on behalf of the Representatives
and on behalf of each of the Underwriters of the Designated Securities pursuant
to Section 12 of the Underwriting Agreement and the address of the
Representatives referred to in such Section 12 are set forth at the end of
Schedule II hereto.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Designated Securities, in the
form heretofore delivered to you is now proposed to be filed with the
Commission.
Subject to the terms and conditions set forth in this letter agreement
and in the Underwriting Agreement incorporated in this letter agreement by
reference, the Company agrees to cause the Trust to issue and sell to each of
the Underwriters, and each of the Underwriters agrees, severally and not
jointly, to purchase from the Trust, at the time and place and at the purchase
price to the Underwriters set forth in Schedule II hereto, the amount of
Designated Securities set forth opposite the name of such Underwriter in
Schedule I hereto, less the amount of Designated Securities covered by Delayed
Delivery Contracts, if any, as may be specified in Schedule II.
During the period beginning from the date of this letter agreement for
the Designated Securities and continuing to and including March 25, 2004, the
Company agrees, and SLM Education Credit agrees that it will cause the Company,
not to, and not to permit any affiliated entity to, offer, sell, contract to
sell or otherwise dispose of, any securities (other than the Designated
Securities) evidencing an ownership in, or any securities (other than the
related Notes) collateralized by, private credit student loans, which are
educational loans to students or parents of students that are not guaranteed or
reinsured under the Federal Family Education Loan Program of any other federal
student loan program, without the prior written consent of the Representatives.
Each Underwriter represents and agrees that (a) it has not offered or
sold and will not offer or sell any Notes to persons in the United Kingdom prior
to the expiration of the period of six months from the issue date of the Notes
except to persons whose ordinary activities involve them in acquiring, holding,
managing or disposing of investments (as principal or agent) for the purposes of
their businesses or otherwise in circumstances which have not resulted and will
not result in an offer to the public in the United Kingdom within the meaning of
the Public Offers of Securities Regulations 1995; (b) it has only communicated
or caused to be communicated and will only communicate or cause to be
communicated any invitation or inducement to engage in investment activity,
within the meaning of section 21 of the Financial Services and Markets Act 2000
(the "FSMA"), received by it in connection with the issue or sale of the Notes
in circumstances in which section 21(1) of the FSMA does not apply to the
Company; and (c) it has complied and will comply with all applicable provisions
of the FSMA with respect to anything done by it in relation to the Notes in,
from or otherwise involving the United Kingdom. The Company represents and
agrees that it has been informed of the existence of the FSA stabilizing
guidance contained in Section MAR2, Ann 2G of the FSA Handbook (the Handbook of
rules and guidance issued by the Financial Services Authority).
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If the foregoing is in accordance with your understanding, please sign
and return to us 7 counterparts of this letter agreement, and upon acceptance of
this letter agreement by you, on behalf of each of the Underwriters, this letter
agreement and such acceptance of this letter agreement, including the provisions
of the Underwriting Agreement incorporated in this letter agreement by
reference, shall constitute a binding agreement between each of the
Underwriters, the Company and SLM Education Credit. It is understood that your
acceptance of this letter agreement on behalf of each of the Underwriters is or
will be pursuant to the authority set forth in a form of agreement among
Underwriters, the form of which shall be submitted to the Company and SLM
Education Credit for examination upon request, but without warranty on the part
of the Representatives as to the authority of the signers of this letter
agreement.
Very truly yours,
SLM Education Credit Funding LLC
By: /s/ MARK L. HELEEN
Name: Mark L. Heleen
Title: Vice President
SLM Education Credit Finance Corporation
By: /s/ MARK L. HELEEN
Name: Mark L. Heleen
Title: Vice President
Accepted as of the date of this letter agreement:
J.P. Morgan Securities Inc.
By: /s/ ANTHONY HERMANN
Name: Anthony Hermann
Title: Vice President
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
By: /s/ ANTHONY WITKOWSKI
Name: Anthony Witkowski
Title: Authorized Signatory
SCHEDULE I
Amount of Designated Securities to be Purchased
Underwriter Class A-1 Class A-2 Class A-3 Class B Class C
J.P. Morgan Securities Inc. $ 120,000,000 $ 61,400,000 $ 65,004,000 $ 8,729,000 $ 12,085,000
Merrill Lynch, Pierce, Fenner &
Smith Incorporated $ 120,000,000 $ 61,400,000 $ 65,003,000 $ 8,728,000 $ 12,086,000
Deutsche Bank Securities Inc. $ 120,000,000 $ 61,400,000 $ 65,003,000 $ 8,728,000 $ 12,085,000
Lehman Brothers Inc. $ 120,000,000 $ 61,400,000 $ 65,003,000 $ 8,728,000 $ 12,085,000
Morgan Stanley & Co. Incorporated $ 120,000,000 $ 61,400,000 $ 65,003,000 $ 8,728,000 $ 12,085,000
Total $ 600,000,000 $ 307,000,000 $ 325,016,000 $ 43,641,000 $ 60,426,000
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SCHEDULE II
Title of each Class of Designated Securities:
Floating Rate Class A-1 Student Loan-Backed Notes
(for purposes of this Schedule II, "Class A-1")
Floating Rate Class A-2 Student Loan-Backed Notes
(for purposes of this Schedule II, "Class A-2")
Floating Rate Class A-3 Student Loan-Backed Notes
(for purposes of this Schedule II, "Class A-3")
Floating Rate Class B Student Loan-Backed Notes
(for purposes of this Schedule II, "Class B")
Floating Rate Class C Student Loan-Backed Notes
(for purposes of this Schedule II, "Class C")
Aggregate principal amount of each Class:
Class A-1: $ 600,000,000
Class A-2: $ 307,000,000
Class A-3: $ 325,016,200
Class B: $ 43,641,000
Class C: $ 60,426,000
Price to Public of each Class:
Class A-1: 100.000%
Class A-2: 100.000%
Class A-3: 100.000%
Class B: 100.000%
Class C: 100.000%
Purchase Price by Underwriters of each Class:
Class A-1: 99.750%
Class A-2: 99.700%
Class A-3: 99.600%
Class B: 99.600%
Class C: 99.350%
Specified funds for payment of purchase price: Same Day Funds
Indenture: Indenture, dated as of March 1, 2004, between JPMorgan
Chase Bank, as Indenture Trustee, and SLM Private Credit Student
Loan Trust 2004-A.
Maturity:
Class A-1: March 2017 Distribution Date
Class A-2: March 2020 Distribution Date
Class A-3 June 2033 Distribution Date
Class B: June 2033 Distribution Date
Class C: June 2033 Distribution Date
Interest Rate:
Class A-1: interpolated 2-month/3-month LIBOR * plus 0.06%
Class A-2: interpolated 2-month/3-month LIBOR * plus 0.20%
Class A-3: interpolated 2-month/3-month LIBOR * plus 0.40%
Class B: interpolated 2-month/3-month LIBOR * plus 0.58%
Class C: interpolated 2-month/3-month LIBOR * plus 0.95%
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* As to initial Accrual Period; thereafter, Three-month LIBOR.
Form of Designated Securities: Book-Entry (DTC)
Time of Delivery: March 25, 2004
Closing location for delivery of Designated Securities:
Sallie Mae, Inc.
11600 Sallie Mae Drive
Reston, VA 20193
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Names and addresses of Representatives:
Designated Representatives: Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Address for Notices, etc.: Merrill Lynch, Pierce, Fenner & Smith
Incorporated
4 WFCN, 10th Floor
New York, New York 10080
Attn: Geoffrey Witt
Modifications to Underwriting Agreement (solely for purposes of this Pricing
Agreement):
1. The following sentence is hereby added to the end of the second
paragraph of the Underwriting Agreement:
In addition, the Trust will enter into separate interest rate cap
agreements (the "Interest Rate Cap Agreements") with Morgan Stanley Capital
Services Inc. and Merrill Lynch Capital Services, Inc. (the "Cap
Counterparties") and a basis swap agreement (the "Basis Swap Agreement"
and, together with the Interest Rate Cap Agreements, the "Swap Agreements")
with JPMorgan Chase Bank (the "Basis Swap Counterparty" and, together with
the Cap Counterparties, the "Swap Counterparties").
2. The following paragraph is hereby added to Section 7 of the
Underwriting Agreement:
(m) The Swap Agreements shall have been entered into by the Trust and
the Swap Counterparties and the Underwriters shall have received a copy,
addressed to them or on which they are otherwise entitled to rely, of each
opinion of counsel required to be delivered thereunder at or before the
Time of Delivery, and a copy of each certificate required to be delivered
thereunder at or before the Time of Delivery.
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