SOURCE: The First Marblehead Corporation

April 17, 2008 15:03 ET

First Marblehead Statement on Bank of America

BOSTON, MA--(Marketwire - April 17, 2008) - The First Marblehead Corporation (NYSE: FMD) today provided the following statement from Jack Kopnisky, the company's Chief Executive Officer and President.

"Earlier today, First Marblehead was notified by Bank of America that due to the ongoing disruption in the capital markets it has decided to exit the private student loan business and focus on providing federal student loans. In connection with this decision, Bank of America has elected to exercise its right to terminate its agreements with First Marblehead due to the filing by The Education Resources Institute (TERI) of a voluntary bankruptcy petition on April 7, 2008.

"We appreciate the business relationship that we have shared with Bank of America to provide alternative private student loan solutions to students and their families. In the current economic environment, we understand and respect Bank of America's decision.

"First Marblehead remains passionate about its mission to provide private student loan solutions to help fill the gap between federal aid and the rising cost of college. We are committed to continue to work with lenders to provide an integrated suite of services including product development, processing and securitization services."

About The First Marblehead Corporation -- First Marblehead provides financial solutions that help students achieve their dreams. The Company helps meet the growing demand for private education loans by providing national and regional financial institutions and educational institutions, as well as businesses and other enterprises, with an integrated suite of design, implementation and securitization services for student loan programs. First Marblehead supports responsible lending for borrowers and is a strong proponent of the smart borrowing principle, which encourages students to access scholarships, grants and federally guaranteed loans before considering private education loans. For more information, go to www.firstmarblehead.com.

Statements in this press release regarding First Marblehead's future services, as well as any other statements that are not purely historical, constitute forward-looking statements for purposes of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based upon our plans and expectations as of April 17, 2008. The inclusion of this forward-looking information should not be regarded as a representation by us or any other person that the future results, plans or expectations contemplated by us will be achieved. You are cautioned that matters subject to forward-looking statements involve known and unknown risks and uncertainties, including economic, legislative, regulatory, competitive and other factors, which may cause actual performance, including future facilitated loan volumes, or the timing of events, to be materially different than those expressed or implied by forward-looking statements. Important factors that could cause or contribute to such differences include: the demand for, and market acceptance of the services we offer and loan programs that are not TERI-guaranteed; our ability to identify, and negotiate agreements with, alternative private student loan guarantors; our success in designing, selling and implementing alternative service offerings, including structural default reserves for future loans; our ability to facilitate the securitization of loans that are not TERI-guaranteed; our relationships with key clients, including their reaction to the TERI bankruptcy filing and related developments; and the other factors set forth under the caption "Item 1A. Risk Factors" in First Marblehead's quarterly report on Form 10-Q filed with the Securities and Exchange Commission on February 11, 2008. We disclaim any obligation to update any forward-looking statements as a result of developments occurring after the date of this press release.

Contact Information

  • Contact:
    Janice D. Walker
    Corporate Communications
    617-638-2047

    Lee Jacobson
    Investor Relations
    617-638-2065