Student loan refinancing and consolidation company CommonBond today announced its first AAA-rated securitization from Moody’s and DBRS for its senior notes. The securitization totaled $234 million on total collateral of $254 million.
The transaction was CommonBond’s sixth and brings the company’s total securitized loan amount to more than $1.2 billion. Goldman Sachs served as structuring agent, co-lead manager, book-runner, and co-sponsor for this securitization. Barclays, Citi, and Guggenheim Securities also served as co-lead managers and book-runners on the transaction.
“Achieving AAA status in six deals is a testament to the high credit quality and operational strength that CommonBond brings to the securitization market,” said David Klein, CommonBond CEO and co-founder. “Our goal has always been to provide best-in-class product to both sides of our market; great debt-reduction options for consumers and robust capital deployment options for investors. The strength of this transaction reflects our commitment to meticulous underwriting, minimal default rates, and high-quality assets. We expect to continue to programmatically issue high performing bonds to a deep and broad investor base over time.”
The bonds priced inside of the company’s last securitization. The senior notes priced at +50 basis points, the B bonds at +80 basis points, and the C bonds at +120 basis points. On a total weighted average basis, this securitization priced at a 27-basis-point improvement from the company’s last deal.
This securitization follows a period of significant growth for the company. In 2017, CommonBond experienced a 250 per cent increase in revenue year-over-year and surpassed its net income target by more than $4 million. Through the end of 2017, the company experienced only two credit defaults. Independent of this securitization, Moody’s is reviewing six senior tranches in three CommonBond securitizations for upgrade.