In a SEC filing, CIT Group said it entered into a stock purchase agreement and three separate loan sale agreements with Nelnet and certain of its wholly-owned subsidiaries pursuant to which CIT will sell its student lending business to Nelnet.

Pursuant to the agreements:

• CIT will sell to Nelnet certain subsidiaries that hold CIT’s residual interests in certain securitization trusts that hold approximately $2.6 billion par value of student loans previously originated by CIT and the related student loan asset-backed debt.
• CIT also will sell to Nelnet approximately $0.95 billion par value in student loan receivables. All of CIT’s remaining government guaranteed student loan assets and servicing rights will be conveyed pursuant to the agreements.

CIT said it expects to receive an aggregate cash payment of approximately $1.1 billion, the majority of which will be used to repay existing debt secured by student loans. CIT expects to record a net gain in the second quarter of 2014 related to these sales and the extinguishment of related debt. The transactions are expected to close on or before April 25, 2014.

The transactions are subject to customary closing conditions. J.P. Morgan Securities acted as exclusive financial advisor to CIT on this transaction.