The New Hampshire Health and Education Facilities Authorities is preparing to issue $71.5 million in asset-backed bonds, a deal in which private student loans originated through the New Hampshire Higher Education Loan Corp. is serving as collateral.
The NHHEFA will issue two series of notes, the 2023A and 2023B, according to ratings analysts at S&P Global Ratings, which will issue $42.2 million and $29.5 million, respectively. The senior bonds will benefit from credit support ranging from 26.0%-29.0%, based on its 'AA' stressed break-even cash flow scenarios.
S&P also expects a 131.1% parity of accrued assets over accrued liabilities. There is also an excess revenue release condition of 133.0% minimum total parity and minimum accrued net assets of $6 million, S&P said.
RBC Capital Markets is the manager on the deal, which should close on October 18, according to the Asset Securitization Report's deal database.
All of the series 2023 bonds will bear fixed interest rates. The series 2023A will comprise a taxable term bond maturing Nov. 1, 2033, and a taxable bond maturing 10 years after that, S&P said. The 2023B series bonds are made up of eight tax-exempt serial bonds that have successive maturity dates occurring on the November 1 of each year beginning in 2026 and running through 2033, and a tax-exempt bond maturing on Nov. 1, 2043.
In-school loans account for 71% of the NHHEFA collateral pool between the two series, while refinancing loans comprise 29%, S&P said. Both series have a reserve account funded at closing with approximately $1.4 million, representing about 2.0% of the initial series 2023 bond balance, which is also the target balance for the transaction, S&P said.
NHHEFA also benefits from excess revenues, which may be released to the transaction if the parity percentage is at least 133.0%, and there is an accrued net asset balance of $6.0 million, the rating agency said.
S&P intends to assign 'AA' ratings to all of the notes.
