Bank of America, JPMorgan Chase and two private equity firms bagged big game when they agreed to buy out Sallie Mae Corp. last week for $25 billion. As the four stake-holding companies now divvy up the spoils of the company, which managed $142 billion in education loans last year, ABS professionals have quickly concluded that the company's securitization activity will increase, not decrease. Spreads on existing SLM paper were in no danger of widening, at least not by press time.

Still, securitization professionals are chewing over almost as many issues as Sallie Mae has ancillary businesses. The acquirers agreed that Bank of America and JPMorgan would each own a 24.9% stake in the company, and that the private equity firms would hold a 50.2% stake. How to handle Sallie Mae's debt management operations (DMO), through which it provides accounts receivable and collection services for student loans, credit cards and mortgages, is less certain, according to industry professionals. Sallie Mae has been servicing private student loans for almost 10 years, since long before securitization of those products took off, as one market participant observed.

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