The Pennsylvania Higher Education Assistance Agency (PHEAA) is prepping a $331.3 million SLABS transaction backed by Federal Family Education Loan Program (FFELP) loans, according to Standard & Poor’s.
The co-lead underwriters on the deal, which is expected to close July 30, are Bank of America Merrill Lynch, Morgan Stanley, and PNC Capital Markets.
The collateral pool is comprised of roughly 87% Stafford loans, 12% Parent Loan for Undergraduate Students (PLUS) loans, and 1.0 % Consolidatio loans from 65,089 borrowers. Approximately 59% of the pool is 97% guaranteed by the Federal government, and the remainder is 98% guaranteed.
S&P assigned preliminary ratings to the single senior tranche of the PHEAA Student Loan Trust 2013-2 notes, rating it 'AA+'.
The transaction benefits from overcollateralization in the form of 2.93% of the adjusted pool balance; this is designed to grow to the sum of 1.90% of the initial adjusted pool balance ($6,484,428) plus 1.70% of the then-current adjusted pool balance (the adjusted pool balance equals the loan pool plus money in the reserve fund), according to S&P.
As with previously securitizations issued by PHEAA, the agency will provide the day-to-day loan servicing. PHEAA has extensive FFELP servicing experience and historically low servicer reject rates, S&P noted.
PHEAA was last on the market in early June with a $583 million deal also backed by FFELP loans.