Sallie Mae gets $16.5 billion debt commitment for buyout by investor group

By Sara Rosenberg

New York, April 18 - SLM Corp., otherwise known as Sallie Mae, has received a debt financing commitment of up to $16.5 billion to help back its buyout by an investor group led by J.C. Flowers & Co., according to a DEFA14A filed with the Securities and Exchange Commission Tuesday.

This debt financing is anticipated to include high-yield notes, which are backed by commitments for bridge facilities, the filing said.

JPMorgan and Bank of America are the lead banks on the debt financing.

Under the transaction agreement, the investor group is buying the company for about $25 billion or $60.00 per share of common stock.

J.C. Flowers along with Friedman Fleischer & Lowe will invest $4.4 billion and own 50.2% of the company, and Bank of America and JPMorgan Chase each will invest $2.2 billion and each will own 24.9%.

The transaction will require the approval of Sallie Mae's stockholders, is subject to required regulatory approvals and is expected to close in late 2007.

Sallie Mae is a Reston, Va., saving- and paying-for-college company.

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