Navient said Monday that investors in six student loan securitizations it services had voted to extend the maturity dates of the bonds.

The trusts, Navient Student Loan Trusts 2014-2, 2014-3, 2014-4, 2014-5, 2014-6 and 2014-7, issued a total of $1.1 billion of bonds backed by federally guaranteed student loans, an asset class that has come under pressure because borrowers are taking so long to repay.  Over the summer, Moody’s Investors Service and Fitch Ratings put some $37 billion of bonds backed by Federal Family Education Loans under review for a possible downgrade.

The possibility that securities rated triple-A could be downgraded steeply, to below investment grade in some cases, sparked a sharp selloff at mid-year.

Servicers and investors have been exploring various steps to avoid downgrades, including repurchasing FFELP bonds at risk of default and repurchasing loans from securitization trusts. But these appear to be the first trusts that have amended maturity dates.

Interestingly, these bonds issued by these six trusts are NOT among those under review by either Fitch or Moody’s.  And they did not seem to be in imminent danger of failing to pay off by maturity, as none of them matured before 2043, according to trust documents.

The amendments, effective Dec. 2, 2015, extend the legal final maturity date of all of the bonds to 2083.

So why haven’t the maturity of more FFELP bonds, particularly those at risk of downgrade, been extended? Most likely because this requires approval by 100% of investors, making it feasible primarily for securitizations that are highly concentrated in the hands of a few investors.

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