Nelnet Student Loan Sale

May 15 (Bloomberg) -- Nelnet Inc. sold $1.35 billion of bonds backed by student loans, paying the lowest relative yields this year, in a sign that investor demand for the debt may be returning.
The Lincoln, Nebraska-based student-loan provider issued three-year bonds rated AAA that priced to yield 70 basis points more than the three-month London interbank offered rate, said a person familiar with today's sale, who declined to be identified because the terms aren't public. That's a narrower spread than the 105 basis points Nelnet was charged last month, and the 100 basis points the company offered on March 31.
The Nelnet sale adds to evidence that credit markets may be thawing after the collapse of subprime mortgages spawned $342.4 billion in writedowns and credit losses at financial firms worldwide. Government-guaranteed student-loan debt spreads narrowed about 5 basis points to 95 basis points last week, according to JPMorgan Chase & Co. High-yield bonds had the busiest week for new issues since November last week and borrowers sold $4.4 billion of auto-loan bonds in the past month.

``There appears to be more renewed investor interest,'' said Gary Santo, a managing director of consumer asset-backed securities at Fitch Ratings in New York. ``Investors seem to be differentiating risk across assets, which can only be a good thing for government-guaranteed collateral.''

Nelnet rose 44 cents, or 3.3 percent, to $13.66 in New York Stock Exchange composite trading. The shares have fallen 45 percent in the past year.

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