Sallie Mae Appoints New Chairman and CFO; Stock Up

NEW YORK (Reuters) - Student lender SLM Corp (SLM.N), known as Sallie Mae, on Monday named banking veteran Anthony Terracciano as chairman and said John Remondi would return to the company as chief financial officer.

The news sent Sallie Mae's beleaguered stock up more than 12 percent.

Albert Lord will continue as Sallie Mae's chief executive and has been appointed vice chairman, the company said.

Terracciano previously held numerous bank executive roles, including president of First Union Corp, CEO of First Fidelity Bank Corp and chief operating officer of Mellon Bank.

Remondi joined Sallie Mae in 1999, but most recently was portfolio manager at Par Capital Management, a Boston-based investment management firm.

Sallie Mae is embroiled in a court battle with a consortium, led by private equity firm J.C. Flowers, that agreed to buy the company for $25 billion, or $60 a share, in cash last April, but later said it wanted to terminate the transaction.

Sallie Mae's shares plummeted as the buyout unraveled, closing on Friday at $16.67. Monday's news helped the stock rise $2.03, or 12.2 percent, to $18.70.

"The company had to make some dramatic changes to re-establish credibility, so these hirings are a huge step in the right direction," said Sean Egan, managing director of credit-rating firm Egan-Jones Ratings Inc.

"However," Egan added, "Sallie Mae still has the problem of difficult conditions in the financial markets, and investors have to keep that in mind."

In December, Sallie Mae said the consortium had refused to renegotiate the disputed buyout. The consortium argues Sallie Mae has suffered a "material adverse change" to its business due to the credit market squeeze and legislation that slashes subsidies to student lenders.

Sallie Mae disagrees and has filed a lawsuit seeking a breakup fee of $900 million from the consortium.

Sallie Mae also said on Monday that it would release 2007 fourth-quarter and full-year earnings on Jan. 23.

(Reporting by Mark McSherry, editing by Lisa Von Ahn)