Sallie Mae increased the size of its second private student loan-backed securitization but priced the deal at wider spreads on Friday.

SLM Private Education Loan Trust 2013-B was originally sized to issue $851 million but last Thursday the student loan lender increased the deal to $1.135 billion, according a Standard & Poor’s report.

Analysts at JP Morgan reported that on Friday the deal priced its floating rate tranche priced at slightly wider levels compared to the issuer’s debut 2013 private issue in February. The 4.76-year floating rate priced at 110 basis points over the one-month Libor versus 105 basis points for the 4.55-year floating rate tranche on the February deal.

The subordinate piece however sold at much wider levels. According to one market source, the class B , single-A tranche on this latest deal sold at 260 basis points over Swaps. By comparison, the last deal priced its subordinate tranche at 238 basis points.   

“If you look at the market across all the ABS asset classes, everything has been pricing wider since February,” said one market analyst familiar with the deal. This is evident in demand for the subordinate piece on the SLM 2013-B deal, which was upsized to $110 million from $83 million.

The SLM 2013-B pool is similar to SLM 2013-A, according to the Fitch Ratings 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.

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