Sallie Mae plans to inject the primary pipeline with a $624 million dose of private student loan-backed securitization, following up on its FFLEP-backed student loan ABS issued last week.
The latest deal SLM Private Education Loan Trust 2013-C has been assigned preliminary ratings by Fitch Ratings. Three class of ‘AAA’ notes will be issued and a class B trance rated ‘A’ is also on offer.
The deal is Sallie Mae’s third private student loan transaction in 2013. The latest deal is backed by credit-tested private student loans originated under Sallie Mae’s private student loan programs.
The weighted average FICO score at origination was 740 and 81% of the loans are co-signed, according to the Fitch Presale report. Fitch said that it expects higher default rates from loans that are not co-signed and have lower FICOs.
According to Moody’s Investors Service report published last week, private student loan securitizations issued between 2010 and 2013 contain loans of stronger credit quality and are as a result likely to perform better than 2006 to 2009 securitizations.
The credit enhancement for the senior and subordinate notes is expected to be 27.6% and 19.6% respectively.