Appropriate tool or algorithm for sloppy alignment of degenerate bases
I believe mafft can align degenerate sequences.  From the documentation for version 7 at: https://mafft.cbrc.jp/alignment/software/anysymbol.html

Acceptable nucleotide symbols in the default mode:
a, c, g, t, u
Ambiguous nucleotides (r, y, w, s, k, m, d, v, h, b; IUPAC-IUB codes) can be used and are scored as:
score(r,a) = ( score(a,a) + score(g,a) ) / 2 
score(r,g) = ( score(a,g) + score(g,g) ) / 2 
score(r,t) = ( score(a,t) + score(g,t) ) / 2 
score(r,c) = ( score(a,c) + score(g,c) ) / 2 
... 
score(r,y) = ( score(r,t) + score(r,c) ) / 2 
... 
score(r,r) = ( score(a,a) + score(g,g) ) / 2 
score(y,y) = ( score(c,c) + score(t,t) ) / 2 


MAFFT is designed for multiple sequence alignment, so will attempt to find a local alignment of homologous segments (using FFT), and then attempt to make a global alignment between the input sequences.