The National Education Loan Network, formerly Union Financial Services, will bring the UFS-1 product line to the public market this year, with the first student loan-backed deal likely to price in the second quarter, said officials at the company.
More widely known as Nelnet, the company recently received approval from Securities and Exchange Commission to issue from the shelf Nelnet Student Loan Corp-2.
"We're ready," said Ronald Page, the primary financial advisor on capital markets. Out of the new shelf, "Nelnet will issue $2.5 billion over the next couple of years, and the first piece of that will be sometime this spring," Page said.
"I think we would really hesitate to put a size on there, because it really depends on the market and the assets that we have available," said Terry Heimes, vice president of NHELP, Inc., a subsidiary of Nelnet. "But the assets will be similar in quality and content, etc. as what's been previously done."
Most recently, out of the UFS-1 trust, Nelnet came to the public market in June, 1999, with a $278 million offering, structured in four floating-rate A-class tranches.
Currently, Nelnet is holding between $500 million and $1 billion in unsecuritized loans on its books, Heimes said. Additionally, the company has warehouse lines, funded through commercial paper conduits, and other bond issues outstanding, with combined assets reaching $3 billion, approximately.
Though UFS had issued nearly $1.5 billion in public and privately placed student loans, up until Nelnet, the company hadn't had an arm specifically dedicated to student lending and student loan-related product.
With the formation of Nelnet, Union Financial Services will act as a subsidiary, working under contract for the new parent company, although UFS is considered a multi-asset type company.
"The key is that Nelnet is the parent and former owner of the UFS-1 trust, and any issuance that has been done was under Nelnet, it's just that Nelnet was previously known as Union Financial Services," Heimes explained.
Page added, "And [Nelnet's] essentially the student loan company, and has the same lines of credit, the S-3's and the non-profit conversion that we've done, and all that kind of stuff."