Navient Credit Funding is planning its first private student loan securitization since being spun off from Sallie Mae in April, according to a presale report published by Moody’s Investors Service.

The $462.5 million transaction, Navient Private Education Loan Trust 2014-CT, is collateralized primarily by private career training loans.  The pool also consists of 8.3% of tutorial loans. Career training loans are typically made to borrowers who attend non degree granting technical training, trade or vocational schools, and certain online courses.  Tutorial loans are made to parents to fund the cost of children attending private tutoring centers or private kindergarten through secondary school.

Navient 2014-CT’s career training loans have average outstanding loan balances of $7,256 and low average monthly payments of $107 because they are non-degree programs, with students spending an average 17 months at school.

The weighted average seasoning for the Navient 2014-CT’s pool is 80 months.

About 71% of the loans are expected to come from the $589.8 million December 2009 transaction, SLM 2009-CT, which has recently paid off, with the remainder of the loans expected to come from Navient’s balance sheet. 

Moody’s assigned the $393.5 million floating-rate, class A notes ‘Aaa’ provisional status, and the $69 million floating-rate, class B notes were preliminarily rated ‘Aa1.’  The class A notes mature in September 2024 and the class B notes mature in October 2024.

The trust will enter into a swap agreement at closing to mitigate the existing basis risk that exists because the floating-rate notes are indexed to one-month Libor, while 80% of the loans are indexed to the prime rate.

The initial purchaser and bookrunner for the deal is JPMorgan

Navient 2014-CT is Navient’s second securitization; in May it completed a $747 million transaction backed by government guaranteed student loans.

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