Sallie Mae offers to purchase up to $200 million series B preferreds

By Taylor Fox

New York, Oct. 27 –Sallie Mae began a cash tender offer to purchase up to two million shares of its floating rate non-cumulative preferred stock, series B, par value $0.20 per share (Cusip: 78442P502), according to a news release.

Each preferred share has a liquidation preference of $100, and there is $400 million aggregate liquidation preference outstanding.

The consideration for each security tendered and accepted for purchase will be $45 per share, plus dividends.

The offer will expire at 11:59 p.m. ET Nov. 24.

If the number of securities that are validly tendered and not properly withdrawn as of the expiration date exceeds the maximum share amount, Sallie Mae will accept for purchase the number of securities that does not result in the total tendered amount exceeding the maximum share amount, subject to proration.

The offer is conditioned on, among other things, Sallie Mae receiving proceeds of at least $500 million from an issuance of senior debt securities. The company announced on Monday that it priced $500 million of 4.2% senior notes due 2025, which are expected to settle on Oct. 29, at which time the financing condition would be satisfied.

J.P. Morgan Securities LLC (866 834-4666, 212 834-8553) is the dealer manager for the offer.

D.F. King & Co., Inc. (877 283-0322, 212 269-5550) is the tender agent and information agent.

Sallie Mae is a Newark, Del., provider of student loans.

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