Skadden Advises Discover in $10.8 Billion Student Loan Deal

Skadden, Arps, Slate, Meagher & Flom is advising Discover Financial Services in its sale of a $10.1 billion private student loan portfolio to one or more strategic partnerships managed by Carlyle and KKR.

The credit card giant and payment service announced Wednesday that its loans will be acquired at a premium for up to $10.8 billion by the end of 2024. Firstmark Services, a division of Nelnet, will be responsible for servicing the loan portfolio upon its sale.

The Skadden team is led by New York M&A partners Jeffrey Brill and June Dipchand, who is also based in Toronto, according to the firm. Skadden also tapped banking partner David Passes and tax partner Alec Jarvis in New York, along with consumer financial services partner Anand Raman, financial institutions regulatory partner Mark Chorazak, and antitrust/competition partner David Wales from Washington D.C.

Brill led a Skadden group that advised on Wells Fargo’s sale of its student loans in December 2020. The bank’s $10 billion portfolio was acquired by a group of investors, including Apollo Global Management Inc. and Blackrock Group Inc.

Sidley Austin advised Carlyle and KKR on its acquisition of Discover’s portfolio. Sidley’s team leads are global finance partners T.J. Gordon and Megan Roberts, along with M&A and private equity partners Ryan Scofield and Courtney Gilberg.

Attorneys from Paul Hastings helped with Carlyle’s side of the deal, while attorneys from Clifford Chance worked individually with KKR.

Partner Shawn Kodes, the co-chair of the asset-backed finance practice at Paul Hastings, is leading advisement for Carlyle with the help of partners Ryan LaForce, Kaitlin Kines, Jaime Madell, Ziemowit Smulkowski, and Michael Wise.

The Clifford Chance team is comprised of partners Robert Villani, Neil Barlow, Alistair Dunlop, Darren Littlejohn, and Jim Gouwar.