Student loan ABS

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.

Deals, trends and research in structured finance and asset-backed securities for the week of Feb. 26-March 4

Moody's Investors Service says forbearance levels were a factor in assigning a higher expected net loss figure for Navient's new FFELP securitization.

The third-quarter forbearance rate of the refinanced private student loans fell to 2.58% from the 8.36% average during the second quarter of the year – which is an approximate 70% decline.

The third offering of bonds secured by non-guaranteed private student loans has a senior-note weighted average life of just 3.44 years, compared to over five years each for two prior Navient SLABS deals this year.

Educational Credit Management Corp. is issuing its third securitization since the start of the pandemic that is collateralized entirely by Federal Family Education Loan Program rehabilitated loans but still carries a negative outlook from Fitch Ratings.

Navient Solutions has approached the market with $780 million securitization of Federal Family Education Loan Program loans, following a similarly structured transaction completed in early August. In a report published Oct. 12, Moody's Investors Service highlighted the elevated risk to those assets during the current pandemic.

Investors continued to tap the COVID-19-driven emergency facility for SBA loan pool purchases, secondary CMBS notes, and private SLABS.