UPDATE 1-First Marblehead says OTS ends cease & desist on unit

* Says continues to examine strategic alternatives

* Shares up 6 pct in premarket trade

March 9 (Reuters) - First Marblehead Corp (FMD.N), one of the largest securitizers of student loans, said the regulators have terminated a cease and desist order that was issued against its banking unit, sending its shares up 6 percent.

The company also said it continues to examine strategic alternatives for the banking unit Union Federal, including a potential sale.

In July, the U.S. Office of Thrift Supervision (OTS) had asked the First Marblehead unit to lower risk by reducing its concentration of private student loans, a move the company said could cause a "significant" loss.

The Boston-based company had also agreed to special OTS oversight, and Union Federal had agreed to a cease-and-desist order from the regulator.

In November, First Marblehead said its banking unit sold private education loans for $3.7 million in proceeds to a newly formed trust affiliated with the parent company leaving no such loans on its units balance sheet. [ID:nBNG462778]

Shares of the company were up 6 percent in premarket trade at $2.91 on the New York Stock Exchange. They closed at $2.74 Monday. (Reporting by Archana Shankar in Bangalore; Editing by Bijoy Koyitty)