Navient is making a January debut in the securitization market with $488 million worth of bonds backed by private student loans, according to Fitch Ratings.

The loans backing Navient Private Education Loan Trust 2016-A were either originated under Navient programs or one of its subsidiaries’ loan programs, including the current Smart Option loan program, and the traditional undergraduate and graduate, law, MBA, medical, private consolidation and direct-to-consumer loan programs.

Compared with previous Navient bonds rated by Fitch, the 2016-A pool has higher concentrations of loans made to two-year schools, lower FICO scores and lower levels of both co-signed loans and Smart Option loans, all of which increase risk.

Some of this risk is mitigated by the unusually high seasoning of the loans. According to Fitch, loans on average are seasoned 51 months, compared with 23 months in the 2015-A deal.

Borrowers included in the pool have a weighted average FICO score of  720; 80% of the loans in the pool were made to four-year schools; 69% of the loans in the pool were co-signed; and none of the loans were more than 30 days past due or involved in a bankruptcy proceeding

Fitch assigned preliminary ‘AAA’ ratings to $430 million worth of senior bonds. The class A-1 notes will mature on Dec. 15, 2025 and the floating- and fixed-rate slices of the class A-2 notes mature on Dec. 15, 2045.  At the subordinate level the trust is offering $58 million of ‘AA’ rated notes. The initial CE for the senior and subordinate notes is expected to be 41.6% and 33.7%, respectively.

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