Sallie Mae ups cap in Dutch auction tender offer for two notes series

By Jennifer Chiou

New York, Sept. 16 - SLM Corp. (Sallie Mae) announced the early results as well as changes to its modified Dutch auction tender offer for its $1,938,678,000 of Libor floating-rate medium-term notes due 2010, series A, and $1,195,966,000 of 4.5% medium-term notes due 2010, series A.

The early participation date was 5 p.m. ET on Sept. 15.

As of that time, Sallie Mae said it had received tenders for a total of $1,240,329,000 of the notes, comprised of $772,847,000, or 39.9%, of the floaters and $467,382,000, or 39.1%, of the 4.5% notes.

The offer will expire at midnight ET on Sept. 29. It began on Sept. 1.

The maximum principal amount of notes to be purchased in the offer has been increased to $1,240,329,000 from $1 billion, and Sallie Mae has elected to exercise its option not to accept any additional tenders from noteholders.

The total purchase price per $1,000 principal amount of notes will equal $950 for the floating-rate notes and $980 for the 4.5% notes - in each case including a $30 early participation amount for notes tendered by the early participation date - plus a clearing premium of no more than $40.

Holders will also receive accrued interest up to but excluding the payment date, which is expected to be Sept. 30.

The clearing premium for both series of notes will be the lowest single premium at which Sallie Mae will be able to accept the tendered notes in a total principal amount equal to the cap with bid premiums equal to or less than the clearing premium.

If the total principal amount of notes tendered at or below the clearing premium is more than the cap, then holders of the notes tendered at the clearing premium will be subject to proration.

Bank of America Merrill Lynch (888 292-0070 or 980 388-4603) and J.P. Morgan Securities Inc. (866 834-4666 or 212 834-3424) are the dealer managers. The information agent is D.F. King & Co., Inc. (banks and brokers call 212 269-5550; others call 800 207-3158).

Sallie Mae provides saving- and paying-for-college programs and is based in Reston, Va.

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