The company intends to apply approximately $2 billion of the net proceeds from the proposed offerings, to physically settle its outstanding equity forward purchase contract, pursuant to which it will effect the repurchase of 44.04 million shares of common stock deliverable to Sallie Mae under the contract.
The dilutive impact of the two offerings will be partially offset by the physical settlement of the outstanding equity forward purchase contract. Any proceeds remaining after such settlement will be used for general corporate purposes.
UBS Investment Bank and Citi will serve as joint book-running managers for the offerings, which include the issuance of $1.5 billion of common stock and $1 billion of mandatory convertible preferred stock, series C.
