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EX-10.1 - EXHIBIT 10.1 - STUDENT LOAN CORP | exhibit10_1.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of The
Securities Exchange Act of 1934
Date
of Report: January 29, 2010
(Date
of earliest event reported)
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The
Student Loan Corporation
(Exact
name of registrant as specified in its charter)
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Delaware
(State or other jurisdiction of
incorporation)
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1-11616
(Commission File Number) |
16-1427135
(I.R.S. Employer Identification
No.)
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750
Washington Boulevard
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Stamford,
Connecticut
(Address
of principal executive offices)
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06901
(Zip
Code)
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(203)
975-6320
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(Registrant's
telephone number, including area code)
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(Former
name or former address, if changed since last report)
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Check
the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any
of the following provisions:
|
[
]
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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[
]
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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[
]
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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[
]
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item
1.01. Entry into a Material Definitive Agreement
On January 29, 2010, The Student Loan Corporation
(the Company) entered into an Amended and Restated Omnibus Credit Agreement,
between the Company and Citibank, N.A. (CBNA), (the Amended and Restated Omnibus Credit Agreement).
The effective date of this agreement is January 1, 2010. CBNA owns 80% of the
Company’s outstanding common stock and is an indirect wholly owned subsidiary of
Citigroup Inc.
The
Amended and Restated Omnibus Credit Agreement will provide up to $6.6 billion in
aggregate credit for new borrowings, including separate tranches (with their own
sublimits and pricing) for overnight funding, Federal Family Education Loan
Program (FFELP) loan funding, private education loan funding and illiquid asset
funding. The initial term of the Amended and Restated Omnibus Credit Agreement
expires on December 30, 2010. The cost of borrowing for overnight funding is
based on the higher of the overnight federal funds target or overnight LIBOR,
while the total cost of funding for other tranches is determined as
follows:
Interest
Rate, based on one-month LIBOR plus
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Fee
on
Undrawn
Balance
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FFELP Loans
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75
basis points
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30
basis points
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Private Education
Loans
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450
basis points
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200
basis points
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Illiquid Assets
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400
basis points on the first $600 million of funding and
655
basis points for supplemental funding (up to $1.1 billion in
aggregate)
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100
basis points
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The
Amended and Restated Omnibus Credit Agreement also requires (1) a pledge of most
of the Company’s financial assets to secure the Company’s obligations; (2) a $57
million upfront commitment fee; and (3) a comprehensive package of
representations, warranties, conditions, covenants (including a borrowing base
and various other financial covenants) and events of default. CBNA’s consent is
required for the release of pledged collateral for whole loan sales,
securitizations, and participation in government funding programs, with the
exception of the Department of Education (the Department) sponsored student
loan-backed commercial paper conduit, the Department’s Loan Participation
Purchase Program and the Department’s Loan Purchase Commitment Program, and with
the exception of certain specified potential securitizations in the first
quarter of 2010.
The
Amended and Restated Omnibus Credit Agreement supersedes and replaces in its
entirety the Omnibus Credit Agreement, dated November 30, 2000, between the
Company and CBNA, as amended (the Original Omnibus Credit
Agreement). $9.2 billion of outstanding borrowings made under the
Original Omnibus Credit Agreement will continue to mature based on their
originally contracted maturities, unless a change of control or an event of
default, as defined by the Amended and Restated Omnibus Credit Agreement,
occurs. A change of control is defined as any event that results in
an entity other than CBNA or its affiliates owning more than 50% of the voting
equity interest in the Company. If a change of control or an event of
default (certain of which require explicit action by CBNA to effect an
acceleration) under the Amended and Restated Omnibus Credit Agreement were to
occur, all outstanding borrowings under the Original Omnibus Credit Agreement
and all new borrowings under the Amended and Restated Omnibus Credit Agreement
would become due and payable immediately.
The
terms of the Amended and Restated Omnibus Credit Agreement are significantly
less favorable than those of the Original Omnibus Credit Agreement and will
substantially increase the Company’s funding costs and reduce net
income.
A
copy of the Amended and Restated Omnibus Credit Agreement is attached hereto as
Exhibit 10.1 and is incorporated herein by reference. The foregoing description
of the Amended and Restated Omnibus Credit Agreement does not purport to be
complete and is qualified in its entirety by reference to such Exhibit
10.1.
Forward-Looking
Statements
Certain statements
contained in this report that are not historical facts are forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995. Forward-looking statements are typically identified by the
words or phrases “believe”, “expect”, “anticipate”, “intend”, “estimate”, “may
increase”, “may result in”, “may fluctuate”, and similar expressions or future
or conditional verbs such as “will”, “should”, “would” and
“could”. These forward-looking statements involve risks and
uncertainties which could cause the Company’s actual results to differ
materially from those the Company expects. For a discussion of risks and
uncertainties that may affect the future results of the Company, please see its
periodic reports filed with the Securities and Exchange Commission and available
on www.sec.gov.
Item
9.01. Financial Statements and Exhibits
(d)
Exhibits
10.1
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Amended
and Restated Omnibus Credit Agreement dated as of January 29, 2010 by and
among the Company and CBNA
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SIGNATURE
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Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
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THE STUDENT LOAN CORPORATION
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Date: January
29, 2010
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By: _______________________
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Name: Scot
H. Parnell
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Title: Chief
Financial Officer
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