The Massachusetts Educational Financing Authority is preparing to sell $473.9 million in notes to be repaid from a pool of private student loans made under Massachusetts Educational Financing Authority's MEFA Loan program.
The transaction is the first out of the Issue N resolution, with the vast majority of notes--$369.4 million, composed of senior federally taxable bonds, according to a presale report from S&P Global Ratings.
All of the notes—a mix of term, taxable and serial bonds—are fixed rate, and varying maturity dates, S&P said.
The 2024A taxable term and 2024A taxable bonds notes have July 1, 2033 and July 1, 2049 maturity dates; the 2024B serial bonds have maturity dates of July 1, 2028, 2029 and 2030, the rating agency said. The senior 2024B bond and subordinate 2024C have the same maturity date, July 1, 2032. The subordinated 2024D bonds have a July 1, 2054 maturity date.
RBC Capital Markets and
The AA, A and BBB notes have 12.7%, 12.5% and 7.0% in credit support, which included excess spread, the rating agency said. The credit support levels provide 6.3x, 6.2x and 3.5x of its base-case net loss assumptions in coverage multiples for the senior and subordinate bonds, S&P said. The notes also have 10.7% and 8.6% in subordination for the senior and senior subordinate bonds, respectively.
S&P assigned AA ratings to the senior bonds; A to the senior-subordinate bonds and BBB to the subordinate bonds.
