Student loan ABS

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.

Most of the deals are FFELP loans, but the sponsor and servicer entity is considered a financially weak company.

Robust salaries are a plus, but concentrating loans in a few well-paying fields presents different risks.

FFELP, Stafford consolidation loans comprise the bulk of the collateral in the transaction.

A high representation of working professional degree holders among borrowers, most notably, medical doctors, boosts confidence in the underlying collateral.

Fitch's negative sovereign-issuer rating for the U.S. casts a negative rating outlook on ECMC Group Student Loan Trust (ECMC) 2021-1, due to DOE reinsurance.

Known as MOHELA 2021-3, the trust will issue a mix of fixed- and floating-rate notes from a capital structure with three tranches, or note classes.

The collateral is made up of private consolidation loans and private student loans that Wells Fargo, another initial note purchaser, had originated.

While the underlying pool of student loans is mixed, 96% of them are non-rehabilitated loans.

While the underlying pool of loans is of strong credit duality, concerns abound about how COVID’s economic impact could negatively affect pool performance.

KBRA says credit quality is assessed via the firm's internal assessments.

The loans, previously securitized in 2015, have a weighted-average interest rate of 8.57%, balances averaging $15,182 and remaining scheduled terms of 186 months.

Deals, trends and research in structured finance and asset-backed securities for the week of April 30-May 6

The FFELP loans carry a minimum 97% guarantee of principal and interest from the U.S. Department of Education.

The FFELP sector would become awash with liquidity as the federally-guaranteed loans are paid and the most distressed borrowers avoid default, market participants said.

Navient Private Education Refi Loan Trust 2021-B has an average balance of $59,226 per account. The previous four Navient securitizations of refinanced private loans had average balances between $73,498 and $79,306.