Collegiate Funding Services (NASDAQ:CFSI)
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Collegiate Funding Services, Inc. Closes Student Loan
Asset-Backed Securities Offering
FREDERICKSBURG, Va., July 27 /PRNewswire-FirstCall/ -- Collegiate Funding
Services, Inc. (NASDAQ:CFSI) today announced that it has closed an offering of
$1.3 billion in floating rate Student Loan Asset-Backed Notes.
(Logo: http://www.newscom.com/cgi-bin/prnh/20050714/DCTH039LOGO )
"The proceeds of this offering will be used to refinance approximately $900
million in auction rate certificates remaining under our privately placed
master trust, Collegiate Funding Services Education Loan Trust I," said J.
Barry Morrow, president and chief executive officer of Collegiate Funding
Services, Inc. "As a result of this financing, we have significantly reduced
the volatility of our long-term funding, while taking advantage of the current
favorable market for asset-backed issues. The additional $400 million will be
used to finance FFELP consolidation loans currently outstanding in our
warehouse facility."
Collegiate Funding Services Education Loan Trust 2005-B, a special purpose
vehicle created to securitize student loan assets, was the issuer of the Notes.
The details of the pricing of the Notes are as follows:
Class Par Amount Interest Rate Final Maturity
Class A-1 Notes $423,000,000 3-month LIBOR plus 0.01% September 28, 2017
Class A-2 Notes $253,000,000 3-month LIBOR plus 0.10% December 28, 2021
Class A-3 Notes $218,000,000 3-month LIBOR plus 0.12% December 30, 2024
Class A-4 Notes $360,500,000 3-month LIBOR plus 0.16% March 28, 2035
Class B Notes $45,500,000 3-month LIBOR plus 0.32% March 28, 2035
TOTAL $1,300,000,000
All of the Class A Notes are rated Aaa by Moody's Investors Service, Inc., AAA
by Fitch Ratings and AAA by Standard & Poor's Rating Services, a division of
The McGraw-Hill Companies, Inc. The Class B Notes are rated Aa1 by Moody's
Investors Service, Inc., AA+ by Fitch Ratings, and AA by Standard & Poor's
Rating Services, a division of The McGraw-Hill Companies, Inc.
As a result of this transaction, the company will expense $4.3 million of
unamortized note issuance costs related to the auction rate certificates. The
company expects this expense to be offset over the next three years by the
elimination of the 25 basis point broker dealer fee incurred under Education
Loan Trust I and by a significant reduction in the company's exposure to
interest rate volatility.
About Collegiate Funding Services
Collegiate Funding Services is a leading education finance company dedicated to
providing students and their families with the practical advice and loan
solutions they need to help manage and pay for the cost of higher education.
Collegiate Funding Services also offers a comprehensive portfolio of education
loan products and services - including loan origination, loan servicing, and
campus-based scholarship and affinity marketing tools - to the higher education
community. As of March 31, 2005, Collegiate Funding Services had facilitated
the origination of more than $19 billion in education loans; the company
currently manages more than $11 billion in student loans for more than 445,000
borrowers. For additional information, visit http://www.cfsloans.com/ or call
1-888-423-7562.
Forward-Looking Statements
This news release includes "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. When used in this release, the
words "looking forward," "expects," "plans," "intends," "believes,"
"forecasts," or future or conditional verbs, such as "will," "should," "could"
or "may," and variations of such words or similar expressions are intended to
identify forward-looking statements. Among the key factors that may have a
direct bearing on the company's operating results, performance, or financial
condition are (1) our ability to successfully implement our private, in-school
loan strategy; (2) changes in terms, regulations, and laws affecting student
loans and the educational credit marketplace, (3) changes in the demand for
educational financing or in financing preferences of educational institutions,
students and their families, (4) changes in the credit quality or performance
of the loans that we purchase, retain and securitize or (5) changes in interest
rates and in the securitization or secondary markets for education loans.
Important factors that could cause the company's actual results to differ
materially from the forward-looking statements the company makes in this
release are set forth in the company's filings with the Securities and Exchange
Commission, including in the section entitled "Risk Factors" in the company's
Quarterly Report on Form 10-Q for the Quarter Ended March 31, 2005. The company
undertakes no obligation to update or revise forward-looking statements which
may be made to reflect events or circumstances that arise after the date made
or to reflect the occurrence of unanticipated events unless the company has an
obligation to do so under the federal securities laws.
http://www.newscom.com/cgi-bin/prnh/20050714/DCTH039LOGODATASOURCE: Collegiate
Funding Services, Inc.
CONTACT: Media, Ann Collier of Collegiate Funding Services, Inc.,
+1-800-762-6441, ext. 5259, or ; or Investors, Edward
Nebb of Euro RSCG Magnet for Collegiate Funding Services, +1-212-367-6848, or
Web site: http://www.cfsloans.com/