Discover Financial Services has announced the sale of its private student loan portfolio, with a principal balance of approximately $10.1 billion as of June 30, 2024. The company has entered into an agreement to sell the portfolio to strategic partnerships managed by Carlyle and KKR, with Firstmark Services, a division of Nelnet, assuming responsibility for servicing the portfolio upon the sale.
The purchase price payable to Discover in the transaction is expected to be up to approximately $10.8 billion, representing a premium to the principal balance of the private student loan portfolio. The transaction is anticipated to be completed in multiple closings by the end of 2024, subject to the satisfaction or waiver of customary closing conditions.
Wells Fargo served as the exclusive financial advisor, and Skadden, Arps, Slate, Meagher & Flom LLP served as legal counsel to Discover Financial Services in connection with the transaction.
Discover Financial Services, founded in 1986, is a digital banking and payment services company that has become 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. It operates the Discover Global Network, which includes Discover Network, Pulse®, and Diners Club International®. The market has reacted to these announcements by moving the company's shares -0.4% to a price of $141.29. For more information, read the company's full 8-K submission here.
