MeasureOne, a new data provider focused exclusively on student loans, launched its first database at the ABS Vegas conference Thursday.
Called Securities Insight, it is a repository of all publicly available Federal Family Education Loan Program and private student loan remittance and servicer reports. The database includes 474 deals spread across 51 separate issuers totaling $240 billion in student loan balances outstanding.
The student loan securities data is compiled, normalized and accessible from a centralized user interface. Subscribers can view and analyze the market, issuers and deals seamlessly. Clients can also access a data feed of daily updates and download the information directly into their own analytic tools.
The MeasureOne data includes delinquency, forbearance, prepayment and other key performance metrics; bond balances, pool balances and parity ratios; the ability to track deals by collateral stratifications at issue; trust collections, expenses and excess spread calculations; and private, FFELP and mixed collateral coverage.
How much demand is there for data on FFELP loans, which are at least 97% guaranteed by the Department of Education? Dan Feshbach, MeasureOne’s founder and CEO, says that there are a number of events, in addition to delinquencies, that can lead to interruptions in the cash flows to investors in student loans and student loan securitizations. The federal government allows borrowers to postpone or reduce payments on some loans during periods of unemployment, economic hardship or military service, for example.
These interruptions in cash flows affect the valuation of the loans and securitizations, so the more information investors have, the more accurately they can value their holdings.
MeasureOne’s database allows investors can quickly and efficiently monitor the performance of the student loan market at an aggregate or granular level and benchmark specific portfolios to deals, issuers or a basket of securities.
In addition, traders and modelers can use the data to perform valuation processes, develop market- and deal-level assumptions for defaults, delinquencies and prepayments, and as a result, make buy-and-hold decisions based on the most up-to-date data.
“Today, student loans comprise the third largest U.S. consumer debt market in terms of size, but there is very little data made available to trade, invest and price student loan securities. This limits participation by investors in the market and drives up the cost of capital for private student loans,”Feshbach said. “Our new Securities Insights data repository is an important step in developing the same level of contributed data and comprehensive insight that investors, traders and regulated institutions find in the mortgage and other consumer loan markets.”