Student Loan Corp's $1.432 Billion Asset-Backed Deal Sold
By Prabha Natarajan, Of DOW JONES NEWSWIRES
NEW YORK -(Dow Jones)- Student Loan Corp. (STU), a subsidiary of Citigroup
Inc. (C) and an originator of student loans, sold $1.432 billion asset-backed
securities on Friday.
Citi was the sole bookrunner on the deal.
In what has become a trend of Citi clearing out its books, and helping
investors find a way to park their extra cash before year end, the bank has sold
nearly $3 billion of asset-backed securities.
The student-loan backed deal is on top of the $1.5 billion credit-card backed
deal that Citi sold on Thursday.
Both deals surprised market participants, who had expected all issuance to be
done for the year. Other investors say that the deal was based on reverse
inquiry to satisfy the requests of large buyers, similar to the credit-card
issue that closed on Thursday.
Such deals offer investors an opportunity to put extra cash in portfolios to
work, said Jim Harrington, a senior portfolio manager with Ryan Labs Asset
Management.
The student loan deal was a single-tranche issue that sold at 75 basis points
over three-month LIBOR rate. The deal is not eligible for cheap funding through
the Federal Reserve's Term Asset-Backed Securities Loan Facility, or TALF.
The issue is backed by the Federal Family Education Loan Program, or FFELP
consolidation loans, and is expected to settle Tuesday.
-By Prabha Natarajan, Dow Jones Newswires; 212-416-2468; prabha.natarajan@
dowjones.com
(END) Dow Jones Newswires
12-18-091444ET
Copyright (c) 2009 Dow Jones & Company, Inc.
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