Sallie Mae is prepping its first student loan securitization of the year, the $745 million SLM Student Loan Trust 2014-1.
The deal is backed by Federal Family Education Loan Program loans with guaranties that are insured by the U.S. Department of Education for at least 97% of principal and accrued interest.
SLM Student Loan Trust 2014-1 will issue classes of securities with preliminary AAA’/ Aaa’ ratings from Fitch Ratings and Moody’s Investors Service: a $205 million class A-1 maturing in May 2019, $137 million maturing class A-2 maturing in July 2021, and $382.5 million class A-3 maturing in February 2029. All three benefit from credit enhancement of 3.52% provided by a reserve account funded at closing.
There is also a $20.5 million class B with preliminary A’/ Aa1’ ratings. It matures in June 2047.
According to Fitch’s presale report, the collateral for SLM 2014-1 is similar to that for series 2013-6 as the collateral was previously pledged to an asset-backed commercial paper conduit. As of Nov. 25, 2013, the statistical cutoff date, the total student loan principal balance was approximately $747 million, with a weighted average borrower interest rate of 6.28%. The average borrower indebtedness was $15,609.
Credit Suisse Securities, Deutsche Bank Securities and J.P. Morgan Securities are the joint lead managers.
