Sallie Mae plans to divide into two public companies

Sallie Mae plans to split into two separate, publicly traded companies. The student loan giant also named John Remondi as its CEO.

Sallie Mae, formally named SLM Corp., said Wednesday that the two separate companies – an education loan management business and a consumer banking business – would help unlock value and boost its long-term growth potential.

The education loan management business would include the company’s portfolios of federally guaranteed and private education loans, as well as most related servicing and collection activities. Remondi will continue as its CEO.

The principal assets of the business are likely to include approximately $118.1 billion in federally guaranteed loans, $31.6 billion in private education loans, $7.9 billion of other interest-earning assets; and a loan servicing business with about 10 million student loan customers. This includes 4.8 million customer accounts serviced under Sallie Mae’s contract with the U.S. Department of Education.

The two separate companies will initially be owned by Sallie Mae stockholders, but the separation of the businesses does not require a shareholder vote.

Newark, Del.-based Sallie Mae anticipates the split, if given final approval by its board, could be completed within 12 months.

French oil company agrees to pay to settle bribe case

The French oil giant Total has agreed to pay $242.5 million to settle criminal charges alleging the company paid bribes to win lucrative contracts in Iran.

Court papers indicate Total paid $60 million in bribes between 1995 and 2004 that allowed it to re-enter the Iranian oil and gas market.

The case was jointly pursued by the U.S. and French governments. French authorities said Wednesday they have requested the company and its CEO face criminal charges there for violating anti-bribery laws.

Also, the U.S. Securities and Exchange Commission entered into an order against Total requiring it to pay an additional $153 million.

The investigation against Total has been ongoing. Last year the company announced it had set aside hundreds of millions of dollars in light of the U.S. investigation.

Robust supply puts pressure on OPEC to limit production

OPEC’s best adherence to its production ceiling in 18 months is failing to buoy the outlook for crude oil prices, raising pressure on the group to pare supplies amid burgeoning U.S. output.

While all but one of 20 analysts in a Bloomberg survey predict the 12-member organization will maintain its target of 30 million barrels a day at its meeting Friday in Vienna, most say OPEC needs to conform better with the limit to keep supply from overwhelming demand. Societe Generale says the necessary reduction could be “substantial.” The Centre for Global Energy Studies says prices may tumble without output curbs.

The Organization of Petroleum Exporting Countries, which accounts for 40 percent of global oil supply, hasn’t stuck so closely to its output ceiling since the current level was set in December 2011, according to data compiled by Bloomberg. That hasn’t stopped Brent, against which more than half the world’s crude is priced, losing 6.6 percent this year, falling as low as $96.75 a barrel on April 18, amid a combination of slowing global demand and surging U.S. shale supplies.

“They’re going to have to keep cutting,” Seth Kleinman, head of energy strategy at Citigroup in London, said Tuesday. “This market’s looking heavy in terms of supply, and it’s getting heavier, and there will come a stage when OPEC needs to address that weight problem. Supply growth will be robust and demand will consistently disappoint.”

Job market shows growth in large cities across the nation

Unemployment rates fell in almost all large U.S. cities in April. The gains show the job market is improving throughout the country. The Labor Department says unemployment rates declined in 344 of the 372 largest metro areas. Rates rose in just 17 cities and were unchanged in 11.

– From news services

 

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