Nelnet priced $573 million of student loan securities backed by 100% Federal Family Education Loan Program (FFELP) collateral.
The deal, NSLT 2014-6, sold the $565 million, 8.2-year, class A notes at 65 basis points over one-month Libor, according to a Standard & Poor’sreport. By comparison, the Mississippi Higher Education Assistance Corp. (MHEAC) last week priced $387 million of class A notes, maturing in October 2035 at a spread of 68 basis points over one-month Libor.
Around 65% of the pool is comprised of rehabilitated FFELP loans. Rehab loans are those that have defaulted and been restructured under the terms of the Higher Education Act of 1965. The government guarantee carried by FFELP loans is what underpins the strong ratings.
At the cut-off date for collateral inclusion, the total loan balance was $570.7 million. The weighted average borrower interest rate was 5.56% and the average level of debt per borrower was $21,603.
The master servicer on the deal is National Education Loan Network and subservicers are Nelnet, Great Lakes Educational Loan Services, Xerox Education Services and Pennsylvania Higher Education Assistance Ageny.
This is the sixth deal completed by Nelnet so far this year, bringing its year-to-date issuance to $3.2 billion, according to S&P. Overall year-to-date issuance in the student loan ABS space is $11 billion, with FFELP accounting for $9 billion.