Discover Bank, a subsidiary of Discover Financial Services, is selling its private student loan portfolio.
The loan portfolio will be sold to one or more strategic partnerships comprised of investment vehicles and accounts managed by the Carlyle Group and KKR. Further, Firstmark Services, a division of Nelnet, will assume responsibility for servicing the portfolio after the sale.
As of June 30, the principal balance of the bankʻs private student loan portfolio was approximately $10.1 billion.
The purchase price payable to Discover in the transaction is at a premium to the principal balance of the private student loan portfolio. Thus, based on certain assumptions, the sale price is expected to be up to approximately $10.8 billion.
The transaction is expected to be completed by the end of 2024 through multiple closings by the end of 2024. The deal is subject to the satisfaction or waiver of customary closing conditions.
Wells Fargo served as exclusive financial advisor, while Skadden, Arps, Slate, Meagher & Flom LLP served as legal counsel to Discover Financial Services.
Discover is a digital banking and payment services company that is one of the largest card issuers in the United States. The company issues the Discover card and offers personal loans, home loans, checking and savings accounts and certificates of deposit through its banking business.