Student loan ABS

Higher education debt originations are poised to turn a corner next year amid industry changes. The big question for observers is whether securitization will follow in 2024 business.

The deal has 76,440 in underlying loans, compared with 46,671 on the 2023-C deal. The average balance per borrower, however, was just $14,657, compared with the $14,430 on the 2023-C deal.

Esoteric transactions' premiums and longer durations are especially attractive, as other consumer assets are put to the test.

The outstanding notes have 18.6%-19.6% of credit support in place, based on stressed break-even cash flow scenarios.

The deal has a sequential repayment structure and collateral with 168 months of seasoning. The loans are already past their peak default periods, which each typically occur three to five years after a borrower enters repayment.

Should the transaction's cumulative default rate exceed 2.45% on or before Oct. 25, 2027, a lockout trigger accelerates note principal repayments from closing until May 25, 2024.

The deal will issue two series of notes, which benefit from a reserve account with approximately $1.4 million, representing about 2.0% of the initial bond balance.

High-quality attributes secure the notes, including that 90.7% of the loans are been co-signed, and just 12.1% of the trust's loans consist of direct-to-consumer (DTC) loans.

The deal also has a reserve account with an initial balance of $8.0 million at closing, representing 2.0% of the initial bond balance.

Both credit card and student loan issuers made up for tepid starts to 2023 by leaping over their first-quarter production numbers, but it wasn't enough to overcome an overall slide.