Educational Finance Group, the rapidly growing student-loan unit of Dallas-based UICI, will enter the term market for the first time, and become a quarterly player in the public asset-backed market after a deal is plucked from its $1 billion shelf registration filing later this year.
EFG recently closed a $515 million funding of its $650 million single seller asset-backed commercial paper conduit facility. Lehman Brothers and Banc of America Securities were named as dealers. Banc of America was also providing liquidity support of more than $650 million for the program.
Warren Idsal, chief financial officer at UICI, said it was likely that Lehman and B of A would be considered for the firm's upcoming term deal, and though timing was still murky, the deal would probably be launched before the millennium.
"We want the markets to know what we're doing," Idsal said. "Our goal is to launch a securitization quarterly once we launch the term [deal.]"
EFG is one of the nation's fastest growing student-loan companies, and has originated or acquired more than $1.3 billion in federal and private loans since becoming a lender in April 1998.
"We've been diversifying our funding sources," Idsal said. He cited an auction-rate deal completed in July. The sale totaled $319.5 million in notes backed by federal education loans held in EFG's portfolio. Proceeds from the sale financed the origination and acquisition of education loans for student and parent borrowers using EFG's federal guaranteed-loan products.
Concurrent with that transaction, EFG purchased $104 million in federal and privately guaranteed loans that had been originated as part of EFG's various programs and funded by an unnamed third party.
UICI also has a credit-card lending business that focuses on consumers with less than stellar credit histories.