Sallie Mae 2013 Annual Report Download - page 28

• $31.0 billion in Private Education Loans, which yield an average of 6.31 percent annually on a “Core
Earnings” basis and have a weighted average life of 7.1 years;
• $6.9 billion of other interest-earning assets, including securitization trust restricted cash;
• a leading student loan servicing platform that services loans for more than 12 million FFELP Loan, Direct
Loan and Private Education Loan customers (including cosigners), including 5.7 million customer
accounts serviced under NewCo’s contract with ED; and
• a leading student loan contingent collection platform with an outstanding inventory of contingent
collection receivables of approximately $16.2 billion, of which approximately $13.5 billion was student
loans and the remainder was other debt.
In connection with the internal corporate reorganization, we will become a subsidiary of NewCo and will
retain all of our liabilities and obligations, including as obligor on our $18.3 billion of unsecured public debt
outstanding as of December 31, 2013. We are also a party to derivative contracts on which we had a net liability
of $794 million as of December 31, 2013.
For more information regarding the businesses to be transferred to and operated by NewCo, NewCo pro
forma financial information, information regarding NewCo’s management and other information concerning
NewCo, please review the registration statement on Form 10 filed by New Corporation, which was initially filed
with the SEC on December 6, 2013 and subsequently amended on February 7, 2014, which can be accessed
through the SEC’s website at www.sec.gov/edgar.
SLM BankCo After the Spin-Off
Following completion of the Spin-Off, SLM BankCo will continue to originate Private Education Loans by
promoting products on campus through the financial aid office and through direct marketing to students and their
families in the education loan market.
SLM BankCo will provide ongoing Private Education Loan servicing and collection on loans it originates
and sells to third parties as a secondary fee-based business. It will also continue to offer various products both to
help families save for college — including its free Upromise service that provides financial rewards on everyday
purchases — and to protect their college investment through tuition, rental and life insurance services.
SLM BankCo will continue to fund Private Education Loan originations through retail and brokered
deposits, and obtain additional funding through sales of Private Education Loans and their securitization.
Business of SLM BankCo
The following description of the business of SLM BankCo is based in part on Sallie Mae Bank’s current
business plan. Sallie Mae Bank’s business plan has been approved and is subject to periodic review by our Board
of Directors and the Board of Directors of Sallie Mae Bank. Sallie Mae Bank’s business plan is also reviewed
annually by the FDIC as Sallie Mae Bank’s regulator. The business plan is based on assumptions and other
factors that are subject to change.
Private Education Loans
SLM BankCo will market, price, underwrite and disburse its Private Education Loan products. To maintain
high credit standards, it will:
• focus its business on helping students attending four-year and graduate schools;
• continue the use of regularly revised and updated statistical underwriting models utilizing ten or more
years of proprietary credit performance data;
• generally require a credit qualified cosigner as a co-obligor; and
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