The scuttled deal for Sallie Mae (NYSE: SLM) by J.C. Flowers has been one of the more fascinating buyout busts of the last few months. It featured a plummeting stock price for SLM, a restructured (and rejected) offer by J.C. Flowers, the threat of a capital crisis, and even a bizarre phone call in which Albert Lord, Sallie Mae's CEO, cursed at analysts.
The litigation between J.C. Flowers and SLM promised more intrigue and pain, but over the weekend it was announced that the two sides have reached an agreement to bring the conflict to an end. Sallie Mae has given up its claim on a $900 million break-up fee, and both sides have agreed to end litigation.
Aside from the broken deal itself, one of the main problems Sallie Mae was facing was its inability to float new debt backed by student loans. The new agreement solves that problem too, providing $31 billion in financing from various banks for the next year, according to Bloomberg.
So it looks like the loan giant will survive the current credit crisis, and live to be bought out another day.
The litigation between J.C. Flowers and SLM promised more intrigue and pain, but over the weekend it was announced that the two sides have reached an agreement to bring the conflict to an end. Sallie Mae has given up its claim on a $900 million break-up fee, and both sides have agreed to end litigation.
Aside from the broken deal itself, one of the main problems Sallie Mae was facing was its inability to float new debt backed by student loans. The new agreement solves that problem too, providing $31 billion in financing from various banks for the next year, according to Bloomberg.
So it looks like the loan giant will survive the current credit crisis, and live to be bought out another day.
Having recently returned to the CEO's role in the wake of a failed leveraged buyout, 
I didn't think the news could get worse for 
Thursday, Sallie Mae -- known more formally as 
Yesterday, Sallie Mae -- known more formally as 