The Carlyle Group Inc. (NasdaqGS:CG) and KKR & Co. Inc. (NYSE:KKR) agreed to purchase an approximately $10.1 billion portfolio of prime student loans from Discover Financial Services (NYSE: DFS) on Jul 17, 2024. As of June 30, 2024, the principal balance of the private student loan portfolio was approximately $10.1 billion. The purchase price payable to Discover in the transaction is at a premium to the principal balance of the private student loan portfolio and, based on certain assumptions, is expected to be up to approximately $10.8 billion. Carlyle?s investment in the portfolio was led by its Credit Strategic Solutions team, a group within its Global Credit business focused on asset-backed investments. KKR?s investment in the portfolio comes primarily from its asset-based finance strategy and other credit vehicles and accounts. Monogram LLC, a portfolio company of Carlyle, will serve as portfolio manager for the student loan portfolio and Firstmark Services, a subsidiary of Nelnet, Inc. will service the loans in the portfolio. The transaction is expected to be completed in multiple closings by the end of 2024 subject to customary closing conditions.

KKR Capital Markets and TCG Capital Markets structured and arranged the debt for the transaction. Sidley Austin LLP served as legal advisor to KKR and Carlyle. Paul Hastings LLP also served as a legal advisor to Carlyle and Clifford Chance LLP also served as a legal advisor to KKR. Wells Fargo served as exclusive financial advisor, and Skadden, Arps, Slate, Meagher & Flom LLP served as legal counsel to Discover Financial Services in connection with the transaction.