Student loan ABS

The securitization amount is smaller than an earlier transaction, and its AAA notes are expected to price at wider spreads than the AAA notes on the 2024-A series.

Note payments are linked to two tranched credit default swap (CDS) transactions, one related to the reference obligation between the issuer and SoFi Bank and SoFi Lending and the Issuer.

Broken down by product type, the agency's NJCLASS Standard Fixed product should account for a large majority of the loans, 75.4%. NJCLASS Consolidation will account for the next-largest group, 14.1%.

Most of the notes will be fixed rate, but the A1B tranche could be benchmarked to the three-month Secured Overnight Financing Rate (SOFR).

There are four risk events that could stop cash flow into SMB 2024-R1's deal—missing overcollateralization targets, a stymied principal distribution and the deals do not exercise an optional clean-up call.

Biden's "Plan B" would see loans reduced or wiped out for millions of Americans — including those whose debt exceeds their original principal amount.

One tranche in the deal, supported by a pool of private student loans, matures every year beginning on June 1, 2029.

The amount of deferred loans allowed in the pool is capped at 70%, with at least 96% of them being cosigned. Also, no more than 6% of loans with a FICO score of less than 700 can be cosigned.

Spreads are expected to come in at 120 basis points over the 3M, I-Curve on the A1A notes and then range from 185 bps—425 bps over the 3M, I-Curve on the class B through class D notes.

Banks that had financed warehouse facilities and investment firms that previously bought pools of loans from originators and servicers are among student debt holders looking for an exit strategy.