RESTON, Va., Dec. 12 /PRNewswire-FirstCall/ -- SLM Corporation (NYSE:
SLM), commonly known as Sallie Mae, today announced the following:
(Logo: http://www.newscom.com/cgi-bin/prnh/20030617/SLMLOGO-a )
To address recent reports in the marketplace regarding the proposed
buyout of Sallie Mae by a group led by J.C. Flowers, Bank of America and JP
Morgan Chase, the company's Board of Directors states the following:
-- Over the past eight weeks, in a series of discussions between the
company and senior representatives of the Flowers group, Sallie Mae has
indicated that, to resolve the dispute between the parties, the company
offered to consider an alternative transaction with the Flowers group,
and to give them the opportunity to update their due diligence and
submit a new proposal to acquire the company with no pre-conditions.
-- The buyer's group has indicated to Sallie Mae that it does not wish to
pursue these opportunities.
-- The Board remains committed to protecting the rights of our
shareholders, and will pursue all available recourse, including the
company's existing lawsuit against the buyer's group.
-- The company has indications of interest, subject to customary terms and
conditions, from 10 financial institutions for new secured warehouse
funding significantly in excess of $30 billion.
The company also made the following announcements:
Financial outlook
The company expects fourth-quarter core earnings per diluted share to
be in the range of $.52 to $.57, excluding non-recurring items such as
merger- related costs. The fourth quarter core earnings per share are being
impacted by funding costs and increased reserves for the FFELP loan
portfolio.
The company will release its private credit trust data on Friday,
December 14, which will show an improvement in charge-offs, 90-day and over
delinquencies, and forbearances.
The company is lowering its 2008 core earnings EPS guidance from $3.25
to a range of $2.60 to $2.80 due primarily to increased costs from
replacing the company's interim funding facility.
The underlying business drivers for the company are strong and
executive management is strategically repositioning certain aspects of the
business to allow for maximum growth and earnings opportunities.
Equity Forward Contracts
Separately, the company has reduced the strike and trigger prices with
its counterparties on equity forward contracts. As a result of these
transactions, the company's aggregate position on equity forward contracts
is 48.2 million shares at an average strike price of $43.93, with trigger
prices ranging from $26.00 to $19.58.
Executive Reorganization
Barry Feierstein has been promoted to lead sales and marketing.
Feierstein, who joined Sallie Mae in 2004, has been responsible for the
company's private loan strategy and development. Robert Autor has been
appointed to lead the company's originations, servicing and call center
operations, in addition to its information technology group. Autor joined
the company in 1999 as part of the Nellie Mae acquisition.
Kevin Moehn, executive vice president, sales and originations, and June
McCormack, executive vice president, servicing, technology and sales
marketing, will be leaving the company.
The Board will continue to work with Sallie Mae's management to
generate shareholder value, and to grow the company's industry leadership
position.
Additionally, the company will be permitting its directors and
executive officers to trade company stock, subject to the company's normal
trading clearance procedures. Due to the proposed Flowers transaction, the
company had restricted its directors and executives from trading company
stock since March 2007.
"Core earnings" net income is a non-GAAP financial measure. The Company
cannot present forward-looking information on earnings on a GAAP basis due
to the inability to forecast the effect of certain items that are excluded
from the Company's core earnings presentations that could result in
significant variability in reported results. Specifically, "core earnings"
differs from GAAP by reporting all securitization transactions as long-term
non-recourse financings, which means reporting net interest income instead
of gains on sale from securitization transactions and servicing and
securitization revenue, not including the periodic unrealized gains and
losses that are attributable primarily to mark-to-market derivative
valuations under GAAP, excluding Floor Income when it is not economically
hedged, as well as excluding goodwill and intangible impairment and the
amortization of acquired intangibles. Additional information on the
Company's "core earnings" net income financial measure is available in the
Company's reports on Form 10-K and Forms 10-Q.
This press release contains "forward-looking statements" including
expectations as to future market share, the success of preferred channel
originations and future results. These statements are made pursuant to the
safe harbor provisions of the Private Securities Litigation Reform Act of
1995. Because such statements inherently involve risks and uncertainties,
actual results may differ materially from those expressed or implied by
such forward-looking statements. Such risks include, among others, changes
in the terms of student loans and the educational credit marketplace
arising from the implementation of applicable laws and regulations, and
from changes in such laws and regulations, adverse results in legal
disputes, changes in the demand for educational financing or in financing
preferences of educational institutions, students and their families, and
changes in the general interest rate environment. For more information, see
the Company's filings with the Securities and Exchange Commission. The
Company does not undertake any obligation to update or revise these forward
looking statements to conform the statement to actual results or changes in
the Company's expectations.
SLM Corporation (NYSE: SLM), commonly known as Sallie Mae, is the
nation's leading provider of saving- and paying-for-college programs. The
company manages $160 billion in education loans and serves nearly 10
million student and parent customers. Through its Upromise affiliates, the
company also manages $19 billion in 529 college-savings plans, and 8
million members have joined Upromise to help save for college with rewards
on purchases at nearly 70,000 places. Sallie Mae and its subsidiaries offer
debt management services as well as business and technical products to a
range of business clients, including higher education institutions, student
loan guarantors and state and federal agencies. More information is
available at http://www.salliemae.com. SLM Corporation and its subsidiaries are
not sponsored by or agencies of the United States of America.
SOURCE Sallie Mae
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Related links:
http://www.salliemae.com
Photo Notes:
NewsCom: http://www.newscom.com/cgi-bin/prnh/20030617/SLMLOGO-a
AP Archive: http://photoarchive.ap.org
PRN Photo Desk, photodesk@prnewswire.com
http://www.prnewswire.com/comp/827187.html/
CONTACT:
Media, Tom Joyce, +1-703-984-5610,
tom.joyce@salliemae.com, or Investors, Steve McGarry,
+1-703-984-6746, steven.m.mcgarry@salliemae.com, both of Sallie
Mae
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