SMB Private Education Loan Trust 2019-A Notes Assigned Ratings


  • SMB Private Education Loan Trust 2019-A's note issuance is an ABS transaction backed by a pool of private student loans.
  • We assigned our ratings to the class A-1, A-2A, A-2B, and B notes.
  • The ratings reflect our view of the transaction's credit support, fully sequential payment structure, and legal structure, among other factors.
 
NEW YORK (S&P Global Ratings) March 13, 2019--S&P Global Ratings today 
assigned its ratings to SMB Private Education Loan Trust 2019-A's (SMB 
2019-A's) private education loan-backed notes (see list).

The note issuance is asset-backed securities (ABS) transaction backed by a 
pool of private student loans.

The ratings reflect: 
  • The approximately 35%-37% and 32%-34% credit support (including excess spread) available in our 'AAA' and 'A' stressed break-even cash flow scenarios, respectively. The credit support is defined as break-even net loss rates used in our 'AAA' and 'A' stressed break-even cash flow scenarios with front- and back-loaded default curves in three different interest rate environments. These credit support levels provide coverage of approximately 4.1x and 3.7x our 8.0%-9.0% base-case net loss range in the 'AAA' and 'A' stressed break-even cash flow scenarios, respectively.
  • The initial overcollateralization of approximately 10.5%. The overcollateralization is defined as the excess of the pool balance over the total note balance, divided by the pool balance.
  • The initial class A overcollateralization of approximately 17.5%. The class A overcollateralization is defined as the excess of the pool balance over the class A note balance, divided by the pool balance.
  • The approximately 7.7% class B subordination for the class A notes. The class B subordination is defined as the class B note balance divided by the total note balance.
  • The fully funded, nondeclining reserve account, which equals 0.25% of the initial pool balance.
  • The transaction's fully sequential payment structure, which builds overcollateralization for the class A and B notes to the greater of 25.0% of the current pool balance or 10.0% of the initial loan balance ($50,640,770).
  • The pool characteristics, including a weighted average FICO score of 746 at the time of the loan application and co-borrowers on 91.9% of the loans.
  • The timely interest and principal payments by the final maturity dates made in the cash flow runs that simulated our 'AAA' and 'A' rating stress scenarios.
  • A scenario analysis, which indicates that under moderately stressful economic conditions (defined as about 2.2x the expected defaults), the 'AAA' ratings would not decline more than one rating category in the first year and that the 'A' rating would not decline more than two rating categories in the first year, which are both consistent with our credit stability criteria.
  • The transaction's legal structure.
We work across the world

From London to San Francisco, to our home base in (Saint Helier) Jersey, we’re looking for extraordinary and creative scientists to help us drive the field forward.

AC Investment Inc. currently does not act as an equities executing broker or route orders containing equities securities. If AC Invest’s business model were to change and it begins routing non-directed orders in NMS securities, it will comply with the disclosure requirement of Rule 606.

77 Massachusetts Avenue Cambridge, MA 02139 617-253-1000 pr@ademcetinkaya.com