SoFi Lending Corp. is in the market with another $436.67 million of notes backed by private student loans.

SoFi Professional Loan Program 2016-D will issue three tranches of notes with preliminary ‘AAA’ ratings from Moody’s Investors Services: $142.77 million floating-rate tranche maturing in January 2039, a $134.4 million fixed-rate tranche maturing in April 2033, and another $128.76 million tranche maturing in April 2033.

There is also a $30.74 million tranche maturing in January 2039 provisionally rated ‘A2.’

The notes are backed by loans used to refinance student loans of former graduate students. Borrowers refinancing student loans are typically less likely to default than borrowers in school and those that have recently entered repayment, because refinancing loan borrowers have established a payment history. The loan pool's strong credit quality is evidenced by a high weighted-average credit score (759), verified annual income ($178,111), and monthly free cash flow ($7,404).

SoFi 2016-D's loan pool has a weighted-average remaining term of 143 months, compared with a term of 180 to 300 months for most other private student loan pools. In addition, Moody’s expect SoFi loans to make a high level of voluntary prepayments, at a rate of 10%-12%, significantly above the low single-digit rate among loans from other PSL lenders. SoFi’s borrowers have greater financial wherewithal to make prepayments, owing to their high income and ample free cash flow.

We expect the SoFi 2016-D notes to have a weighted-average expected life of approximately 3.4 years.

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