Real Estate Lender Implosion

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Sallie Mae reports $1.6B quarterly loss

The student lender cited heavy borrowing costs, $575 million reserve to cover expected losses on student loans.

January 23 2008: 10:53 AM EST

WASHINGTON (AP) -- Embattled Sallie Mae, the nation's largest student lender, on Wednesday reported a fourth-quarter loss of $1.6 billion as it slumped under heavy borrowing costs and set aside $575 million to cover expected losses on student loans.

The quarterly loss at SLM Corp. (SLM), as the company is formally known, was equivalent to $3.98 a share, compared with a profit of $18 million, or 2 cents a share, in the fourth quarter of 2006.

The Reston, Va.-based company reported a loss on a "core" basis of $139 million, or 36 cents a share in the October-December period, compared with profit of $326 million, or 74 cents a share, a year earlier. Core earnings exclude treatment for student loans bundled together as securities and derivatives, the complex financial instruments used as a hedge against interest rate swings

http://money.cnn.com/2008/01/23/news/companies/bc.apfn.earns.salliemae.ap/index.htm?source=yahoo_quote