Three separate offerings of private loans consolidating the debt of medical students and other recent graduates hit the market last week.

Iowa’s state student loan agency is marketing $188.75 million of bonds backed by a mix of private student loans and loans used to consolidate the debt of medical school graduates, according to Fitch Ratings.

Iowa Student Loan Liquidity Corporation Series 2016A will issue two tranches of notes with preliminary ‘A’ ratings: $57.9 million of series 2016-A1 notes and $130.85 million of series 2016A-2 notes; all benefit from 33.77% credit enhancement; the maturities have yet to be determined.

Aspire Resources, a wholly owned subsidiary of ISL, is the servicer, and Pennsylvania Higher Education Assistance Agency is the backup servicer.

Iowa Student Loan (ILS) was established in 1979 to make federally guaranteed student loans and has been making private student loans since 1993. In 2015, it began making consolidation loans to medical school graduates and residents through an arrangement with Link Capital Partners, an entity 60% owned by ILS.

The notes are being issued by a master trust backed by $410 million of fixed-rate private student loans; however, proceeds from the series 2016A notes will be used to acquire existing loans and originate new consolidation loans through September 2018.

Private student loans are not guaranteed by the government, although they tend to perform better than other kinds of unsecured debt because they are generally not dischargeable in bankruptcy. In its presale report, Fitch noted that the pool of collateral is significantly concentrated in Iowa, which could result in potentially higher delinquency and defaults due to rolling recessions, regional economic downturns, and natural disasters.

The rating agency expects 15% of the loans to default, in its base case scenario.

However, the trust will not release any excess cash until all of a previous series of notes issued in 2011 bonds are paid-in-full and the corresponding swaps have been terminated, provided the senior parity is at least 200%

Darien Rowayton Bank (DRB) is also marketing $95.7 million of bonds backed by private student loans, according to DBRS.

The DRB 2016-R transaction is the sponsor’s seventh securitization of student loans. It will issued two tranches of notes with preliminary ‘A’ ratings: $38,276,000 class A-1 notes and $57,414,000 of class A-2 notes.

The transaction consists entirely of student loans to medical resident Borrowers enrolled in this program and employed full-time as intern, resident, or fellow are required to pay only a nominal monthly amount for the entire duration of the post-graduate training and up to six months following the end of training, the presale report states.

Finally, CommonBond is marketing $168.5 million of consolidation loans to graduates with advanced degress via CommonBond Student Loan Trust 2016-B, its third rated term securitization.

The trust will issue three tranches of notes with a final maturity of October 2040. The fixed-rate class A-1 notes will be primarily secured by a group of fixed-rate loans and the variable-rate class A-2 notes will be primarily secured by a group of variable-rate loans; both are rated ‘AA’ by DBRS. The class B notes will be secured by both the fixed-rate and the variable-rate loans and are rated ‘BBB.’

At the time of origination, the portfolio has a weighted average credit score of 770. Additionally, the refinanced student loans have a weighted-average borrower income of $159,028 and a weighted-average monthly borrower free cash flow after expenses of $5,966, according to DBRS.

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