Sallie Mae deal worth $31 billion

RESTON, Va., Jan. 28 (UPI) -- Sallie Mae, the troubled student loan service, secured $31 billion in financing Monday and settled its legal difficulties with JC Flowers, the company said.

A financial consortium including the Bank of America, JP Morgan, Barclays Capital, Deutsche Bank, Credit Suisse, Royal Bank of Scotland and UBS AG of Switzerland have committed to the $31 billion financing deal that will last for one year.

Sallie Mae, headed by chairman Tony Terracciano, had pushed for the previous buyers group, JC Flowers, to pay $900 million in break up fees in July, 2007, at about the time they were battered by cutbacks in student loan subsidies and by the credit crisis. That deal included a purchase price of $60 per share, the Financial Times reported.

Shares for Sallie Mae, the more familiar name for the SLM Corp., rose 32 cents to 20.02 in Monday's trading, indicating some skepticism in the company remains, the report said.