Sallie Mae gets $6.8 billion facility with syndicate of eight banks

By Susanna Moon

Chicago, June 10 - Sallie Mae said it closed a new $6.8 billion credit facility to facilitate term securitization of its federally guaranteed loans.

The facility was oversubscribed by a syndicate of eight global financial institutions, according to a Sallie Mae press release.

The facility is secured exclusively by FFELP loans and will amortize over a one-year period.

The size of the facility exceeds the balance remaining in the company's Straight A federally sponsored financing program and, as a result, the company will end participation in the program before the January 2014 deadline, the release noted.

"The Straight A program was instrumental in ensuring that families could access federal student loans in the height of the economic crisis when consumer credit was, in general, extremely hard to come by," Joseph DePaulo, executive vice president, banking and finance, Sallie Mae, said in the press release.

"We are pleased to secure this alternative facility and refinance these loans ahead of schedule. Our conservative liquidity standards, strong support from our bank group and demand from the capital markets for quality term ABS make this an attractive transaction."

Sallie Mae said its assets in the Straight A facility have fallen to $6.9 billion as of March 31 from a high of $24.1 billion in December 2010, primarily through the issuance of term securitization transactions.

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