Just 66% of the collateral Navient Private Education Refi Loan Trust 2018-C consists of loans to borrowers with graduate, medical, law or other advanced degrees, down from 72% in a similar transaction in February.
Private student loans made before the financial crisis were once considered a toxic asset. A recent $414 million securitization by FirstKey, an affiliate of Cerberus Capital Management, shows how much things have changed.
That's a departure from the state student loan authority's previous offering, completed in 2017, which was backed by a mix of private and federally guaranteed student loans, and was rated one notch lower by S&P Global Ratings.
The $35 million offering of fixed-rate bonds comes from a new mater trust and will be taxable; previously, the state student loan authority has funded refinance loans with the same tax-free bonds used to fund in-school lending.
The Tennessee community bank garnered a triple-A from two credit rating agencies for its inaugural securitization this month of loans refinancing the debt of borrowers with advanced degrees and high-paying jobs.