Brazos Higher Education Authority is preparing to issue $43.1 million in asset-backed securities repaid from a pool of Brazos private refinance student loans.
RBC Capital Markets is the underwriter on the deal, which will issue notes through five tranches, according to a pre-sale report from S&P Global Ratings. All of the notes are fixed rate, and will have expected maturity dates ranging from April 1, 2030 through April 1, 2043. The deal is expected to close on November 7.
All of the notes will carry 'AA' ratings, according to S&P. Nelnet Servicing and Pennsylvania Higher Education Assistance Agency (PHEAA) will service the notes, according to ratings analysts. U.S. Bank is serving as trustee, paying agency and the bank account provider.
The outstanding notes have 18.6%-19.6% of credit support in place, based on stressed break-even cash flow scenarios, according to the rating agency. Those credit support levels provide 4.8x to 5.0x coverage of S&P's expected net loss rate of 3.0% to 4.0% for the pool.
Brazos Higher Education Authority, 2023-1A has expected senior and overall bond parities of 125.8% and 114.1% at closing, respectively.
As for the pool characteristics, the collateral contains loans to 2,255 borrowers, with an average balance per borrower of $45,191, S&P said. On a weighted average basis the loans have a remaining term of 138 months and a borrower rate of 4.26%. Also on a WA basis, the loans have a borrower FICO credit score of 784, and borrowers have a debt-to-income ratio of 26.6%. Some 95.6% of the loans are in the repayment phase.
Some 39.0% of the collateral pool is made up of loans funding undergraduate degree candidates; while 24.3% of the pool is financing graduate degrees, according to the rating agencies.
