UPDATE 1-First Marblehead posts narrower Q3 loss

* Q3 loss $1.42/shr vs loss of $2.36/shr a yr-ago

* Q3 rev -$130.6 mln vs rev of -$251.8 mln a yr-ago

* Shares fall 5 pct

April 28 (Reuters) - First Marblehead Corp (FMD.N), one of the largest securitizers of student loans, posted a narrower loss for the third quarter as its cost-cutting initiatives paid off, and its negative top-line narrowed.

Net loss for the quarter ended March 31 was $140.7 million, or $1.42 a share, compared with a loss of $229.6 million, or $2.36 a share, a year ago.

The Boston-based company posted narrower negative total revenue of $130.6 million from a negative revenue of $251.8 million last year.

An analyst had expected the company to post a loss of $1.30 a share, excluding special items, and negative revenue of $144.0 million, according to Reuters Estimates.

Total non-interest expenses fell 39 percent to $75.0 million helped by expense reduction initiatives, the company said in a statement. First Marblehead's bread-and-butter business, packaging student loans into securities, has dried up in recent times, thanks to prolonged turmoil in global debt markets. Shares of the company were down 5 percent in trading before the bell Tuesday. They closed at $1.79 Monday on the New York Stock Exchange. (Reporting by Amiteshwar Singh in Bangalore; Editing by Gopakumar Warrier)