Nelnet issued a statement yesterday about Moody's Investors Service's decision to downgrade the company's senior unsecured rating from 'Baa2' to Ba1.
"We are disappointed with Moody's decision, however, we look forward to continuing our discussions with the rating agencies to demonstrate the fundamental strengths of our company, the student loan companys release said.
Nelnet further added that despite the unprecedented global credit crisis, it is still a profitable education services company, citing its strong earnings for 3Q08, which its said, underscores the success of our diversification strategy into stable, fee-based businesses that have significant growth opportunities and operating margins.
The company added that it focused on government guaranteed student loan assets that carry virtually no default risk. We believe that this high quality portfolio will generate in excess of $1.4 billion of cash flows over the next many years, it said in the statement.
Nelnet yesterday reported GAAP net income for 3Q08 of $23.8 million, or $0.48 per share, compared with a GAAP net loss of $15.7 million, or $0.32 per share, for 3Q07. Base net income excluding discontinued operations and legislative and restructuring related charges for 3Q08 was $23.4 million, or $0.47 per share, compared with $22.2 million, or $0.45 per share, for the same period a year ago.
The company also reported that it has provided additional equity support for its $2.5 billion federal student loan warehouse facility. All of the student loans held in this facility are guaranteed by the federal government, Nelnet said.
