Sallie Mae announced Wednesday that it planned to sell $2.5-billion of stock. The company, known formally as the SLM Corporation, said it would use most of the money — about $2-billion — to pay off equity forward contracts, buying back 44 million shares of the company. The rest of the money would go to general corporate purposes, the company said in a news release.
This week is the end of a coarse year for Sallie Mae. The company’s shares fell to a five-year low this month after the student lender’s chief executive, Albert L. Lord, failed to assure investors about the health of the company.
In September, a $25-billion takeover of Sallie Mae fell apart, the victim of a new law that cuts federal subsidies to student-loan providers.
The company’s stock rose 7 cents on Wednesday, finishing at $22.13, far below its 52-week high of $58. —Scott Smallwood