Student Loan Refi ABS Expected to Remain Stable Despite Coronavirus Disease (COVID-19) Concerns
DBRS Morningstar currently rates 62 student loan refinance asset-backed securities (Refi SLABS) transactions with an aggregate outstanding principal balance of approximately $15 billion. While the impact of the ongoing coronavirus outbreak poses challenges to the U.S. ABS market, with certain asset classes expected to be more negatively affected than others, we believe that Refi SLABS is a sector that should remain stable, barring a substantially more severe and prolonged disruption. Although weakening economic conditions will result in performance deterioration, such effects are mitigated by the credit quality of the obligor as well as strong structural features and protections.
DBRS Morningstar is a global credit ratings business with 700 employees in eight offices globally. DBRS and Morningstar Credit Ratings are committed to empowering investor success, serving the market through leading-edge technology and raising the bar for the industry.
Together, we are the world’s fourth largest credit ratings agency and a market leader in Canada, the U.S. and Europe in multiple asset classes. We rate more than 2,600 issuers and 54,000 securities worldwide and are driven to bring more clarity, diversity and responsiveness to the ratings process. Our approach and size provide the agility to respond to customers’ needs, while being large enough to provide the necessary expertise and resources. For more details visit us at dbrs.com.
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