Scottsdale, Ariz. - During a panel at Strategic Research Institutes' Asset Securitization 2002, it was announced that Sallie Mae/USA Education, as it privatizes itself, will substantially increase its ABS issuance over the next four years. This year, the company intends to hit about $10 billion in issuance, and aims for about $20 billion annually by 2004.
Sallie Mae/USA education will be a non-government entity by 2006, which is the driving the factor behind its plans to increase issuance. Without the balance sheet and funding options it enjoys via its government guaranty, the student lender will become more reliant on alternative sources of funding.
In all of 2001, student loans accounted for approximately $15 billion of the $350 billion in total issuance in the U.S. public and rule 144A markets, according to Thomson Financial. Sallie Mae issued just more than $6 billion in 2001.
Meanwhile, the student lender is also planning to start issuing non-guaranteed student loan paper this year, first via the conduit market, but eventually through term transactions, possibly by year-end, a Sallie Mae official said. These transactions, when they come to term, will be issued separately from the guaranteed loan-backed product line.