Darien Rowayton Bank – with a fledging student loan refinancing program for graduates of prestigious medical, business and law schools – has issued its second asset-backed securitization of 2016.

DRB Prime Student Loan Trust 2016-B is a $176 million transaction split into three classes of notes. The notes are divided between a $21.5 million Class A-1 tranche of  floating-rate student loans; a $143.7 million Class A-2 tranche of fixed-rate loans with terms greater than five years; and a $10.8 million fixed-rate class of A-3 notes with a pool of loans under 60 months.

Bond rating agency DBRS has assigned provisional ‘AA’ structured finance ratings to each tranche. The deal is expected to close May 23.

Credit enhancement is provided by excess interest, separate reserve account, overcollateralization and limited cross-collateralization. The initial OC levels are 14.9% of the pool balance and reserve account amount for the A-1 notes; 13.9% for the A-2 notes; and 13.4% for the A-3 notes.

DRB of Darien, Conn., is issuing its sixth securitization in just three years. The bank has originated over $1.5 billion of student loans to over 13,000 borrowers. The borrowers are almost overwhelmingly graduate students who are employed in dental (43%), medical (29%) and pharmaceutical (6%) roles. Other borrowers include advanced-degree nurses, lawyers, and MBA graduates.

Only 3% of the loans were issued to undergraduate – a much lower level than other peer-group student loan refinancing firms like Sofi Lending Corp which had nearly 15% of loans its last securitization tied to undergrads.

The average borrower in the DRB pool has a FICO score of 768, income of $212,015 and a debt to income ratio of 27.5%. Most of the loans have seasoning of at least 46 months, and between three and four years remaining on their loan maturities.

The deal is on par with many of the aspects of DRB’s most recent securitization in January. The primary difference was in the lower percentage of floating-rate loans in the pool (12.3%) vs. the 25-35% levels in DRB’s five previous student-loan ABS transactions.

Very few loans (1.4%) were derived from the former Parent PLUS, the discontinued indirect student lending program that contributes as much as 16.4% to the SoFi 2016-A pool.

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