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SoFi launches $1B refi SLABS deal, the lender's largest to date

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SoFi Lending Corp.’s latest securitization to date of refinanced professional student loans is its largest to date, with a deal size topping $1 billion.

SoFi Professional Loan Program 2020-B Trust is a $1.06 billion asset-backed offering of bonds secured by a pool of loans made to advanced-degree graduates of medical, dental or legal universities, or MBA recipients.

The transaction is the 29th rated deal for SoFi, which has sponsored securitizations of its refi loans since 2015.

The capital stack includes $568.2 million in Class A-1FX notes and $437.5 million in Class A-2FX notes – which each tranche carrying early AAA ratings from DBRS Morningstar.

The Class A notes benefit form 9.23% overcollateralization and 5.7% initial subordination. Also supporting the Class A notes is a reserve account equal to 0.25% of the initial principal balance and an excess spread.

It’s the ninth SoFi transaction to include residency refi loans, (2.9% of the pool), which are made to medical or dental school residents while still enrolled in a medical or dental residency or a fellowship. SoFi launched the residency refi program in 2017, and has issued $644 million in such loans to date. Borrowers are permitted to defer loan payments during their term of residency but must make a minimum $100 payment per month.

The collateral pool has a weighted average borrower FICO of 779 with income of $155,969 and monthly free cash flow of $6,577.

SoFi, through the end of 2019, had originated $28.7 billion in refinancing loans to 360,000 different borrowers.

All the loans are serviced the Higher Education Loan Authority of the State of Missouri (MOHELA), a long-established servicer in the private student-loan space as well as direct loans for the U.S. Department of Education.

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Student loan ABS Refinance SoFi