2 Min Read
Dec 6 (Reuters) - Sallie Mae Corp, the largest U.S. student loan provider, filed regulatory documents on Friday that will enable it to split into two companies, a move it first announced in May to try to win better stock market valuation for its private student-lending business.
Sallie Mae plans to split the company into one business made of federally guaranteed and private student loans and the servicing and collections activites around those loans. The second business will include its consumer banking business and private education-lending business.
The regulatory filing, a registration statement for the still unnamed new company, said that one SLM share would translate into one share in each of the two companies after the split.
The new loan company will hold the largest portfolio of education loans through the Federal Family Education Loan Program under which private lenders make student loans backed by the government.
According to the documents, the new company's assets include $105 billion of these FFELP loans, $32 billion in private education loans and $7.8 billion in other interest-earnings assets. It also services 10 million federal loan customers.
In an emailed statement, Sallie Mae spokeswoman Patricia Nash Christel said the company expects to complete the spin-off by the end of the second quarter of 2014.