SLM Corporation (NYSE: SLM), commonly known as Sallie Mae, today announced the pricing of the public offerings of 101,781,170 shares of its common stock at $19.65 per share and of $1.0 billion aggregate liquidation preference of 7.25% mandatory convertible preferred stock, series C.
Each share of mandatory convertible preferred stock, series C, represents a $1,000 liquidation preference and is subject to mandatory conversion on December 15, 2010, into between 41.7188 and 50.8906 shares of Sallie Mae common stock, unless previously converted at the option of the holder. Both offerings are expected to close on December 31, 2007, subject to satisfaction of customary closing conditions.
Sallie Mae has granted the underwriters for the offerings a 30-day option to purchase up to 15,267,176 additional shares of common stock and a 30-day option to purchase up to an additional $150 million aggregate liquidation preference of 7.25% mandatory convertible preferred stock, series C, to cover over-allotments, if any.
As previously announced, the company intends to apply approximately $2.0 billion of the net proceeds from the offerings to physically settle its outstanding equity forward contract, pursuant to which it will effect the repurchase of 44,039,890 shares of common stock deliverable to Sallie Mae under the contract. The dilutive impact of the two offerings will be partially offset by this settlement of the outstanding equity forward contract. Any proceeds remaining after such settlement will be used for general corporate purposes.
UBS Investment Bank and Citi are acting as joint book-running managers for the common stock and mandatory convertible preferred stock offerings. Copies of the prospectus supplements relating to the offerings may be obtained by contacting UBS Investment Bank or Citi.
Shelf registration statements relating to the shares of common stock and the shares of mandatory convertible preferred stock have previously been filed with, and have been declared effective by, the Securities and Exchange Commission. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction. Any offer will be made only by means of a prospectus, including a prospectus supplement, forming a part of the related effective registration statements. -- Sallie Mae
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