Deal Scan: S&P, DBRS Diverge on Earnest Student Loan ABS
Split Ratings: S&P and DBRS have diverged on rating the senior notes in Earnest Student Loan Program 2017-A. While DBRS assigned a preliminary AA (high) rating requested by the issuer to the Class A-1/A-2 notes in the $175.26 million transaction, S&P limited the senior notes to an A rating, citing limited performance history for Earnest Operations loans. The notes are backed by non-guaranteed private student loans issued to borrowers with high FICO credit scores (775) and annual incomes averaging $135,595. The loans are entirely refinancings, issued through Earnest Operations LLC. Goldman Sachs was the lead underwriter.
Private-Label Cards: S&P Global Ratings and DBRS issued preliminary triple-A senior note ratings for the Series 2017-A series of $400 million in notes being issued by World Financial network Credit Card Master Note Trust. The bonds are backed by receivables from small-balance credit-card accounts originated by Comenity Bank through merchant partner agreements.
Equipment Receivables: Leaf Commercial Capital is securitizing a new round of equipment loan and leases it originates and services through LEAF Receivables Funding 12, Series 2017-1. Moody’s Investors Service and DBRS have assigned triple-A ratings to the Class A-2 and A-3 notes in the $356.23 million deal. Leaf leases small- and medium-ticket commercial products including office, telephony, medical and industrial equipment. This is the sponsor’s seventh transaction since 2011.
UK Home Loans: Moody’s also issued provisional AAA ratings Monday for the Series A notes for the £574.9 million static cash pool of first-lien UK home loans originated mostly in the last two years by Principality Building Society. Friary No.4 PLC includes a limited number of interest-only loans (12.8% of the pool), and has no buy-to-let mortgages among the collateral.