Bonds and Notes Payable

9 Months Ended

Sep. 30, 2019

The following tables summarize the Company’s outstanding debt obligations by type of instrument:


	As of September 30, 2019
	Carrying amount		Interest rate range	Final maturity
Variable-rate bonds and notes issued in FFELP loan asset-backed securitizations:
Bonds and notes based on indices	$	18,961,410	2.20% - 3.81%	11/25/24 - 9/26/67
Bonds and notes based on auction	773,726		3.02% - 3.84%	3/22/32 - 11/26/46
Total FFELP variable-rate bonds and notes	19,735,136
Fixed-rate bonds and notes issued in FFELP loan asset-backed securitization	374,500		2.53% / 3.45%	10/25/67
FFELP warehouse facilities	739,448		2.22% / 2.26%	11/20/20 / 5/31/22
Consumer loan warehouse facility	144,022		2.23%	4/23/22
Variable-rate bonds and notes issued in private education loan asset- backed securitizations	82,338		3.40% / 3.77%	12/26/40 / 6/25/49
Fixed-rate bonds and notes issued in private education loan asset-backed securitization	53,368		3.60% / 5.35%	12/26/40 / 12/28/43
Unsecured line of credit	—		—	6/22/23
Unsecured debt - Junior Subordinated Hybrid Securities	20,381		5.46%	9/15/61
Other borrowings	45,465		2.77% - 3.85%	10/7/19 - 5/30/22
	21,194,658
Discount on bonds and notes payable and debt issuance costs	(284,468)
Total	$	20,910,190


	As of December 31, 2018
	Carrying amount		Interest rate range	Final maturity
Variable-rate bonds and notes issued in FFELP loan asset-backed securitizations:
Bonds and notes based on indices	$	20,192,123	2.59% - 4.52%	11/25/24 - 2/25/67
Bonds and notes based on auction	793,476		2.84% - 3.55%	3/22/32 - 11/26/46
Total FFELP variable-rate bonds and notes	20,985,599
FFELP warehouse facilities	986,886		2.65% / 2.71%	5/20/20 / 5/31/21
Variable-rate bonds and notes issued in private education loan asset-backed securitization	50,720		4.26%	12/26/40
Fixed-rate bonds and notes issued in private education loan asset-backed securitization	63,171		3.60% / 5.35%	12/26/40 / 12/28/43
Unsecured line of credit	310,000		3.92% - 4.01%	6/22/23
Unsecured debt - Junior Subordinated Hybrid Securities	20,381		6.17%	9/15/61
Other borrowings	120,342		3.05% - 5.22%	1/3/19 - 12/15/45
	22,537,099
Discount on bonds and notes payable and debt issuance costs	(318,359)
Total	$	22,218,740

FFELP Warehouse Facilities

The Company funds the majority of its Federal Family Education Loan Program (the "FFEL Program" or "FFELP") loan acquisitions using its FFELP warehouse facilities. Student loan warehousing allows the Company to buy and manage student loans prior to transferring them into more permanent financing arrangements.

As of September 30, 2019, the Company had two FFELP warehouse facilities as summarized below.


	NFSLW-I (a)		NHELP-II (b)	Total
Maximum financing amount	$	500,000	500,000	1,000,000
Amount outstanding	387,510		351,938	739,448
Amount available	$	112,490	148,062	260,552
Expiration of liquidity provisions	November 20, 2019		May 31, 2020
Final maturity date	November 20, 2020		May 31, 2022


Advanced as equity support	$	22,238	25,853	48,091

(a) On March 8, 2019, the Company decreased the maximum financing amount for this warehouse facility to $500 million. On May 16, 2019, the Company extended the expiration of liquidity provisions to November 20, 2019, and extended the maturity date to November 20, 2020.

(b) On May 30, 2019, the Company extended the expiration of liquidity provisions to May 31, 2020, and extended the maturity date to May 31, 2022.

Asset-Backed Securitizations

The following table summarizes the asset-backed securitization transactions completed during the first nine months of 2019.


	2019-1						2019-2	Private education loan 2019-A	2019-3	2019-4	2019-5		Total
	Class A-1 Notes		Class A-2 Notes	2019-1 total
Date securities issued	2/27/19		2/27/19	2/27/19	4/30/19	6/25/19	7/24/19	8/22/19	9/25/19
Total original principal amount	$	35,700	448,000	496,800	416,100	47,159	498,300	418,600	374,500			2,251,459

Class A senior notes:
Total principal amount	$	35,700	448,000	483,700	405,000	47,159	485,800	408,000	364,500			2,194,159
Bond discount	—		—	—	—	—	—	—	(114)			(114)
Issue price	$	35,700	448,000	483,700	405,000	47,159	485,800	408,000	364,386			2,194,045
Cost of funds	1-month LIBOR plus 0.30%		1-month LIBOR plus 0.75%		1-month LIBOR plus 0.90%	Prime rate less 1.60%	1-month LIBOR plus 0.80%	1-month LIBOR plus 0.87%	2.53%
Final maturity date	4/25/67		4/25/67		6/27/67	6/25/49	8/25/67	9/26/67	10/25/67

Class B subordinated notes:
Total principal amount				13,100	11,100		12,500	10,600	10,000			57,300
Bond discount				—	—		—	—	(4)			(4)
Issue price				13,100	11,100		12,500	10,600	9,996			57,296
Cost of funds				1-month LIBOR plus 1.40%	1-month LIBOR plus 1.50%		1-month LIBOR plus 1.55%	1-month LIBOR plus 1.65%	3.45%
Final maturity date				4/25/67	6/27/67		8/25/67	9/26/67	10/25/67

On June 7, 2019, the Company extinguished all $93.0 million of the notes included in one of its FFELP asset-backed securitizations prior to the notes' contractual maturity. The Company paid a $1.4 million premium to extinguish the notes and wrote off $0.4 million of debt issuance costs. In total, the Company recognized a $1.8 million expense to extinguish the notes, which is included in other expenses on the consolidated statements of income.

During the third quarter of 2019, the Company extinguished an additional $675.6 million of notes payable included in certain FFELP asset-backed securitizations prior to the notes' contractual maturities. To extinguish the notes, the Company paid a premium of $12.6 million and wrote off $1.4 million of debt issuance costs. In total, the Company recognized $14.0 million in expenses in the third quarter of 2019 to extinguish these notes, which is included in other expenses on the consolidated statements of income.

Consumer Loan Warehouse Facility

On January 11, 2019, the Company obtained a consumer loan warehouse facility with an aggregate maximum financing amount available of $100.0 million, an advance rate of 70 or 75 percent depending on the type of collateral and subject to certain concentration limits, and a maturity date of January 10, 2022. On April 25, 2019, the Company amended the agreement for this warehouse facility to increase the aggregate maximum financing amount available to $200.0 million, extend the expiration of liquidity provisions to April 23, 2021, and extend the final maturity date to April 23, 2022. As of September 30, 2019, $144.0 million was outstanding under this warehouse facility and $56.0 million was available for future funding. Additionally, as of September 30, 2019, the Company had $50.2 million advanced as equity support under this facility.

Unsecured Line of Credit

The Company has a $382.5 million unsecured line of credit that has a maturity date of June 22, 2023. As of September 30, 2019, no amount was outstanding under the line of credit. The line of credit provides that the Company may increase the aggregate financing commitments, through the existing lenders and/or through new lenders, up to a total of $400.0 million, subject to certain conditions.

Other Borrowings

During 2017, the Company entered into a repurchase agreement, the proceeds of which are collateralized by FFELP asset-backed security investments. Included in "other borrowings" as of September 30, 2019 and December 31, 2018, was $40.5 million and $41.4 million, respectively, subject to this repurchase agreement.

During 2018, the Company entered into a repurchase agreement, the proceeds of which were collateralized by private education loans. On June 25, 2019, the Company terminated this repurchase agreement. Included in "other borrowings" as of December 31, 2018 was $45.0 million subject to this repurchase agreement.

On May 30, 2019, the Company entered into a $22.0 million secured line of credit agreement with a maturity date of May 30, 2022 and an interest rate of one-month LIBOR plus 1.75%. As of September 30, 2019, $5.0 million was outstanding under this line of credit and $17.0 million was available for future use. The line of credit is secured by several Company-owned properties.

The Company had other notes payable included in its consolidated financial statements which were issued by partnerships for certain real estate development projects. Although the Company's ownership interests in these partnerships are 50 percent or less, because the Company was the developer of and is a current tenant in the associated buildings, the operating results of these partnerships were included in the Company's consolidated financial statements. On January 1, 2019, the Company adopted a new accounting standard for leases (see note 1). As a result of the adoption of this new standard, these real estate entities were deconsolidated, including $33.9 million of related debt. Prior to January 1, 2019, this debt was included in "other borrowings."