This day and age, even the pre-E3 announcements are awesome. Sega latest press release lets gamers in on the news that Dreamcast titles will become downloadable on PSN and Xbox Live later this year (as in the Fall). Two games kick off the digital Dreamcast return, Crazy Taxi and Sonic Adventure. Games will include increased resolution, 5.1 audio, and the necessary additions like Trophies and Achievements.
No word on what other games are coming, or if other companies will be joining in. The two games above were Sega-produced. Here’s hoping for some Sega Marine Fishing action, easily the best fishing title ever made for its sheer insanity and addictive aquarium collection options. Hopefully these games are also updated with online multiplayer as well, something not noted in the press release, just leaderboards.
AIG Unit Buys Into Servicer of Student Loans.(Educational Loan Servicing LLC )(Company overview)
American Banker June 6, 2006 | Shenn, Jody Educational Loan Servicing LLC of Rockville, Md., is set to announce today that it plans to begin providing private-label origination outsourcing for the fast-growing private student lending market.
To help get that business up and running by the fall, American International Group Inc.’s United Guaranty Corp. has made an investment in the servicer, which does business as Campus Partners.
United Guaranty, which has not revealed the size of the investment, is based in Greensboro, N.C. It is best known as a mortgage insurer but began insuring private student loans in 2003.
A widening gap in recent years between education costs and consumer savings and federal aid has created explosive growth in private student lending. Observers expect that growth to continue. here citi student loans
“We think with the growth in the marketplace … there is clearly room for another competitor,” said Michael Carey, Campus Partners’ president.
He would not provide much detail on his company’s origination-service ambitions, except to say that, at least in the short term, it does not expect to get to be as big as First Marblehead Corp., the leader in the field.
Campus Partners is “out aggressively prospecting today” for outsourcing clients, has heard of “significant interest,” and has a “scalable” platform, he said. It would run its origination services out of Winston-Salem, N.C., where its servicing operations are based.
The servicer began in 1964 as Wachovia Services, a division of Wachovia Bank, and began servicing student loans the following year.
For many years it was part of Academic Management Services Inc., which was one of the top 20 originators of federal student loans when SLM Corp. (better known as Sallie Mae) acquired it in 2003.
Regulations that prohibit schools from using a billing servicer and a collection agency owned by the same company led Sallie to sell the servicing business to the privately held JPT Partners LLC, Campus Partners’ current parent, in early 2004.
Campus Partners says about 500 clients use it to service about 600,000 loans that are not federally insured. According to a press release scheduled for release today, it plans to provide a “turnkey outsourcing solution for private student loans,” including credit underwriting, insurance, loan origination, funding, and loan servicing. It would work with lenders, marketing partners, and schools.
Mr. Carey said it expects to securitize most of the assets and hold residuals, but it would also offer to let clients acquire them.
Its executive team includes a number of veterans of the student lending business, Mr. Carey said. His brother, Paul Carey, the chief executive of Campus Partners, is a former executive vice president at Sallie, where Michael Carey worked for 17 years.
During the 2004-05 school year the volume of private loans rose 32% from a year earlier, to $13.8 billion, according to the College Board, a New York nonprofit that offers college admissions, guidance, assessment, and financial aid services. Such loans grew faster than any other form of student aid.
In its annual report, First Marblehead said it was aware of two principal competitors: Sallie and Servus Financial Corp., a company bought by Wells Fargo & Co. in 2000 that does high-profile work as the disburser of financing for Microsoft Corp.’s training courses.
First Marblehead’s biggest clients are JPMorgan Chase & Co., Bank of America Corp., PNC Financial Services Group Inc., and Royal Bank of Scotland Group PLC’s Charter One Bank. During its fiscal third quarter, which ended March 31, the Boston company facilitated the origination of $706 million of private student loans available for securitization, or 45% more than it did a year earlier.
Thomas K. Brown, the founder and chairman of Second Curve Capital LLC, has been a big proponent of the idea that banks and other lenders are unlikely to develop on their own the skill set for originating private student loans, even if they already make federal student loans.
Last month in an article on his investment firm’s Web site, Mr. Brown touted a deal in which First Marblehead (which Second Curve Capital owns shares of) will provide direct-to-consumer private student loans for KeyCorp, which generally provides private student loans in-house. The deal is more evidence of the value the outsourcer provides to lenders, he wrote.
Campus Partners’ affiliation with United Guaranty, which has insurance in force on about $4 billion of private student loans, would mirror First Marblehead’s partnership with the Education Resources Institute, a nonprofit guarantor of such loans.
Alan Atkins, the president and group executive of United Guaranty’s domestic consumer group, said the insurer saw an opportunity to participate as an investor in a business supporting “one of the fastest-growing consumer assets there is,” as well as to augment its sales of such insurance. site citi student loans
There is also “some demand for another alternative in the marketplace” in terms of outsourcing packaged with insurance, Mr. Atkins said. Existing options involve relying on protection from guarantors that may not be as highly rated, he said.
United Guaranty carries double-A or equivalent ratings from all the major rating agencies — compared to Education Resources’ counterparty rating of Baa3 (the lowest investment grade rating) from Moody’s Investors Service Inc. and its A-plus insurer financial strength rating from Fitch Inc.
Bill Davidson, the chief financial officer at the Education Resources Institute, or TERI, in a brief interview pointed out its long history and strong market share.
“As far as I’m concerned there is no competitive advantage from any weakness TERI might have because TERI doesn’t have any weakness,” he said.
Education Finance Partners Inc., a San Francisco private student lender that was founded in 2003 and has backing from Morgan Stanley, does all of its work in-house and does not offer its services to others.
Tamera Briones, Education Finance Partners’ CEO, said that over time she expects the “free-for-all” created by the market’s growth to lead to margin compression that will eventually make it difficult to be in the business without handling all parts of it.
However, that inevitable maturing of the industry may be as many as 10 years away, Ms. Briones said. “What I can assure you is, the marketplace we have today is going to evolve.” Mr. Carey said he believes many originators will continue to lack the scale to want to do the business on their own. He and Thomas Green, Campus Partners’ vice chairman, also own part of Student Trust Inc., a Washington provider of federal consolidation loans.
A spokesman for Campus Partners said Student Trust does not plan to use his firm’s new services to get into private student lending.