Oklahoma Student Loan Authority 2010 (OSLA 2010) is in the market with a $232 million FFELP-backed student loan deal. The three-tranche SLABS is managed by Bank of America Merrill Lynch.

For more preliminary details on the SLABS deal, please click the link below from the ASR Scorecards database.

According to a Fitch Ratings presale report, the series 2010A bonds will be issued pursuant to a discrete trust indenture that is dated Sept. 1 between OSLA and The Bank of Oklahoma as indenture trustee. 

Proceeds from the bond sale are for acquiring roughly $243 million of FFELP student loans from its 1996 A indenture as well as to fund initial deposits to the reserve accounts. 

Fitch added that the credit quality of the deal's trust collateral is high based on the guarantees provided by its eligible guarantors and the reinsurance from the U.S. Department of Education for at least 97% of the FFELP loans' principal and accrued interest.

In terms of the general student loan sector, BofA Merrill analysts recently recommended that investors maintain a market weight to student loan ABS. They also prefer subordinated FFELP classes as they think that some of the same factors that have benefited the subordinated credit card sector should benefit the subordinated FFELP sector. These factors include the demand for higher yielding assets, limited supply, and minimal headline risk.

BofA Merrill analysts are expecting that the Federal Deposit Insurance Corp. (FDIC) will make some announcement regarding its Safe Harbor provisions at the agency’s board meeting this month. Limited supply and stable credit performance should also support the firm's market weighting to the other ABS sectors.

They noted that the demand for higher yielding assets is still be strong, adding that most accounts have focused on floorplan, rental fleet, whole business deals, and, increasingly,
private student loan ABS, they said.

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