Business lender CIT Group Inc. agreed to sell its
student-lending business to Nelnet Inc., which is buying the
federal family education loans and related assets for $3.6
billion.
The deal, which both companies announced in separate filings
with the Securities and Exchange Commission, include $2.6 billion
of securitized student loans and related assets under a
stock-purchase agreement, and about $950 million of unsecuritized
student loans.
Nelnet, an education loan provider, said it expects the deal
will close later in April. The acquisition will increase the
company's student loan portfolio to more than $29 billion.
CIT Group, meanwhile, said it expects to receive a cash payment
of about $1.1 billion, the majority of which will be used to repay
existing debt secured by student loans. The company expects to
record a gain in the second quarter related to the sale and the
extinguishment of the debt.
Shares of both CIT and Nelnet were roughly flat in after-hours
trading.
Write to John Kell at john.kell@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires