Student loan ABS

CommonBond is coming to the securitization market again with another trust that uses the highly selective prefunding period feature to issue notes backed by private, refinanced student loans.

The idea of forgiving student debt has gained traction in the Democratic presidential debates. Undiscussed so far: the significant impact any program could have on the roughly $175 billion of securities backed by student loans.

Of the roughly $250 billion severely derogatory outstanding balance, defaulted student loans make up 35%, a New York Fed report found. That’s a new phenomenon.

Navient’s next securitization of private student-loan refinancing will involve only loans primarily issued to advanced-degree professionals by online lender Earnest, which Navient acquired in 2017.

The collateral will include $147.3 million in well-seasoned loans that were part of HESAA’s 2009 issuance, as well as up to $155 million in new loans that the trust will originate through an Oct. 31, 2020 prefunding and recycling period for the next academic calendar year.

Navient Corp. is returning to all fixed-rate collateral for its next securitization of refinanced private student loans issued via its Earnest affiliate to high-earning college graduate professionals.

Nelnet's second ABS of federally insured private student loans consists entirely of formerly delinquent FFELP loans that are back in current status.

SLM Corp. wants to "target the people our competitors are targeting and bring on their federal balances" CFO Steven McGarry said during an earnings call.

Since most U.S. securities transactions are subject to New York law, it could be expedient to pass legislation defining Libor as SOFR plus a spread, says David Bowman, special adviser to the Fed.

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.