Navient is marketing its third federally guaranteed student loan securitization of this year.
The $758.2 million Navient Student Loan Trust 2015-3 is backed wholly by Federal Family Education Loan Program (FFELP) loans, including approximately 20% of rehab loans. The loans are reinsured by the United States Department of Education for at least 97% of the principal and interest.
The trust will issue two tranches of senior notes, consisting of $252.2 million class A1 notes and $486 million class A2 notes, both rated AAA’ by Fitch Ratings. The subordinate tranche of $20 million class B notes is rated A+.’
Navient Student Loan Trust 2015-3 has a slightly higher proportion of rehab loans than Navient’s first two FFELP securitizations of the year; rehab loans represented approximately 15% of the collateral in each of those deals. Borrowers who have fallen behind on payments but are now current are generally considered more risky than those who have always been current.
It also has a higher proportion of consolidation loans, 49% compared with 0.03% and 39.5% for the second and first deal of the year, respectively. Consolidation loans cannot be refinanced.
A similar portion of loans are in repayment: 68.79% vs 66.69% and 67.9%.
Navient, spun off from Sallie Mae in April 2014, completed eight student loan securitizations last year.
Navient will service 100% of the trust’s student loan pool, and Fitch deems the company an acceptable servicer of FFELP loans in its presale report.