Sallie Mae is marketing its second private student loan-backed securitization of 2013 via the $851 million SLM Private Education Loan Trust 2013-B.
The lender was last in the market in February where it successfully placed, to good investor demand, the first subordinate tranche backed by these loans since 2007.
On this latest issue Sallie Mae plans to issue $585 million of floating rate notes rated ‘AAA’ by Fitch Ratings; and $183 million of ‘AAA’ fixed rate notes.
The capital structure will also, once again, test investor appetite for subordinate paper of this asset class. The structure offers $83 million of ‘A’- rated notes.
The SLM 2013-B pool is similar to SLM 2013-A, according to the Fitch presale report. However, in comparison with SLM‟s last two private student loan transactions in 2012, the 2013 transactions consist of 15% more Smart Option loans.
The Smart Option loans included in the 2013 transactions are expected to perform better than the traditional Signature/EXCEL loans, as Smart Option borrowers are required to pay either accrued interest or a fixed amount during the in-school, grace or deferment period.
The average FICO score at origination for all borrowers is 740 for SLM 2013-B, compared with 741 for 2013-A, 733 for 2012-E and 740 for 2012-D. Co-signed loans accounted for approximately 80% of the pool, consistent with the prior three transactions. Fitch expects higher defaults from loans without a co-signer or with a low borrower FICO score.