Student loan ABS

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.

Loans that have yet to be originated must adhere to limitations. No more than $719,870 of originations can consist of loans made to students attending proprietary schools.

At around June 15, 2024, the VSAC will reach the end of a collateral recycling period, when it has the option to originate additional eligible loans.

NaviRefi loans account for 30% of the collateral securing the Navient Private Education Refi Loan Trust, 2023-A's. It is a noticeably higher amount than the previous deal, the 2022-B, which contained a 21% concentration.

The deal has an exposure to fixed-to-floating interest rate risk. While 75%-88% of the total notes are fixed rate, while just 57% of the underlying assets are.

Chief Justice John Roberts told a Biden administration lawyer the program will have enormous financial implications for millions of Americans.

Loan forgiveness would help offset FFELP student loan ABS low prepayment rates and maturity risk, a primary driver of rating downgrades since 2016.

Smart Option loans lack a government guarantee, but typically are extended to borrowers with higher credit quality and a higher percentage of co-signers.

Delinquencies could trend downward, similar to the rise in early stage delinquencies in 2020, but observers say high inflation could add pressure to in-school repayments.

A strong capital structure boosts confidence in the timely payments of the notes, including provisions to mitigate negative carry.

The NCSLTs say whether student loan ABS trusts are “covered persons” and thus under the CFPB’s regulation is not something that an appeals court should decide.

At issue are CFPB claims that the National Collegiate Student Loan Trust (NCSLTs) had engaged in deceptive student loan debt collection and unfair litigation practices.

Fitch Ratings affirmed classes on five transactions, and upgraded class B notes on one deal, citing strong performances, plus upgraded B notes on a 2004 transaction.