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Sallie Mae Earnings Estimate Raised at FBR on Debt Acquisition

Sept. 17 (Bloomberg) -- SLM Corp., the lender known as Sallie Mae, had its 2011 earnings estimate boosted 8.4 percent at FBR Capital Markets after announcing the acquisition of $28 billion of debt bundled and sold as bonds and related assets from Citigroup Inc.’s Student Loan Corp.

Earnings next year will equal $1.42 a share, analysts Matt Snowling and Michael Tarkan said today in a research note. Their previous estimate for 2011 profit was $1.31.

The debt acquisition “should serve as a catalyst for the stock,” the Reston, Virginia-based analysts wrote. They maintained their “outperform” rating and $19 price target for SLM shares. Sallie Mae rose 50 cents, or 4.5 percent, to $11.72 in New York Stock Exchange composite trading, the biggest gain since July 7.

The company, also based in Reston, is paying $1.2 billion for the debt assets, the analysts said.

To contact the reporter on this story: Sarah Mulholland in New York at smulholland3@bloomberg.net

To contact the editor responsible for this story: Alan Goldstein at agoldstein5@bloomberg.net

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