Nelnet is marketing its third securitization of federally guaranteed student loans of the year, according to a presale report published by Fitch Ratings.

The $402 million Nelnet Student Loan Trust 2015-3 is backed entirely by Federal Family Education Loan Program (FFELP) loans. It will issue two tranches of notes: a $394.5 million senior tranche with a preliminary ‘AAA’ rating from Fitch and a $7.5 million subordinated tranche with a preliminary ‘A+’ rating.

Approximately 24.68% of which have previously defaulted but have been current for at least nine months. That is almost identical to the 24.6% of so-called rehabilitated FFELP loans in Nelnet’s previous deal, completed in March. Rehabilitated FFELP loans default at a higher rate than loans that have never defaulted. Although they benefit from the same guarantee of at least 97% of their principal, they can produce more frequent disruptions in cash flows.

Among other loan metrics, the average borrower indebtedness, $16,634, is higher than the $11,700 for Nelnet’s previous deal, but similar to the figure for its first deal of the year. The weighted average borrower interest rate for the latest deal is 5.82%, lower than 6.46% for Nelnet’s previous deal. Of the student loans, 45.76% were originated before July 1, 2006, which entitles them to 98.0%, rather than 97.0%, guaranteed reimbursement of principal and accrued interest.

Xerox Education Services, LLC will service 94% of the NSLT 2015-3 portfolio; Pennsylvania Higher Education Assistance Agency will service approximately 6% of the portfolio.

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