Darien Rowayton Bank (DRB) announced this week that it closed its fifth securitization with its total issuance reaching more than $1.1 billion. Credit Suisse led the $188 million securitization which was made up of 75% fixed interest rate loans and 25% variable interest rate loans. It was rated A2 to A3 by Moody’s Corporation and AA by DBRS.
Executives at DRB noted that these securitization deals will ensure that the national bank is able to offer its customers the lowest possible interest rates. This month’s securitization follows similar deals DRB closed in November 2015 (for $359 million) and December 2015 (for $333 million).
Securitization is when a non-liquid asset, or group of assets, is transformed into a security. It minimizes the risk for the lender. Multiple other student lenders such as SoFi and CommonBond did likewise recently.
DRB is the fastest marketplace lender to reach $1 billion in student loan refinancing, and it has helped thousands of student borrowers refinance or consolidate their student loans since 2013. The company noted that they offer interest rates lower than other national brands and that the average customer can save over $20,000 over the life of their loan by refinancing through DRB.
Student loan debt has become a major concern throughout the nation, with many borrowers looking to refinance or consolidate in an effort to lower their monthly payments. About 40 million Americas owe a combined $1.41 trillion in student loan debt. And with the Federal Reserve expected to raise interest rates sooner than later, many borrowers will be looking to lock in a lower rate for existing loans.
image copyright Darien Rowayton Bank