Student loan ABS

Navient Corp. shares surged after Canyon Capital Advisors said it could boost a $3.1 billion takeover offer that was rejected by the student-loan servicer.

For the first time in almost two years, borrowers are taking out floating-rate loans to refinance their student debt. So Navient is testing investor appetite for floating-rate bonds backed by refinance loans.

Now that the noncompete has expired, Navient plans to market private student loans to borrowers in school; the servicing giant is also free from restrictions on marketing refinance loans through Earnest.

The company has filed a request with a federal judge in Pennsylvania for a summary judgment in two counts against it, accusing the bureau of failing to provide evidence.

Physicians account for 28.8% of borrowers in the collateral pool, up from 22% for SoFi's previous student loan securitization, according to Moody's Investors Service. Notably, fewer of these, 4.2% versus 7.8%, are in residency programs.

The $748 million Navient Student Loan Trust 2019-1 looks a lot like the four FFELP deals the sponsor completed in 2018; it is backed by a mix of rehab (19.6%) and non-rehab (80.4%) loans.

This time, the $98.4 million of underlying collateral was originated by before the financial crisis by Citibank via its former student lending affiliate, the Student Loan Corp.

Many banks remain wary of student loans given the government's dominance in the market, but some fintechs see untapped potential.

It's the first time the refinance student lender used this feature to lock in current funding costs, according to Moody's Investors Service.

Calling a $149 million transaction and securitizing the notes allows Goal Structured Solutions to benefit from a reduction in spreads since 2016.

Starting next year, the servicing giant plans to go after some of SLM Corp.'s best borrowers – at least with refinance student loans.

Like recent Federal Education Loan Program securitizations from Nelnet and Navient, it has meaningful exposure to rehabbed loans and loans in income-based repayment plans.

Refinance loans account for just 21% of the collateral, and even among those borrowers, just under half have advanced degrees.

A two-year-old lawsuit by the CFPB may be languishing, but nine members of the Teachers Federation of America sued the student loan servicing giant alleging that it misled borrowers in public service professions in order to line its pockets.

The report from an advocacy group that focuses on college affordability says that schools need to do a better job of educating students about their eligibility for federal loans, which typically carry lower interest rates than loans from banks and other private-sector lenders.

SoFi’s $577.5 million offering is the sponsor’s 23rd rated term student loan ABS transaction, while Massachusetts’ $164 million offering is only its second deal.

Nearly a third of borrowers, 29.5%, backing the $500 million transaction are making timely payments, up from 27.4% for the prior deal and higher than the lender’s previous two deals.

Seth Frotman, whose student lending unit had been gutted in May, said the bureau's current leadership "has abandoned its duty to fairly and robustly enforce the law.”

Cheap funding and marketing muscle could give it an advantage over existing lenders, but this corner of the market may not be big enough to move the needle for the bank.

Borrowers who were once delinquent but are now making timely payments account for a quarter of the collateral, more than the student loan servicer's past two deals.