First Marblehead gets some relief

Earlier this week we wrote about how some directors of The First Marblehead Corporation, who were also large shareholders, were feeling the financial pain of the company’s recent stock swoon.

The company, and the directors, got some relief Friday from Goldman Sachs, which agreed to invest up to $260.5 million in the Boston-based packager of student loans.
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On the news, the price of First Marblehead stock jumped nearly $7.50 a share, closing at $18.70.
On paper, that increased the value of the shares held by director Leslie Alexander by more than $135 million. Alexander, who owns the Houston Rockets of the NBA, controls about 18.2 million shares.

First Marblehead is experiencing fallout from the credit crunch. There is concern about growing defaults among student borrowers making it difficult to package loans into structured securities, the company’s core business.

First Marblehead shares traded for as much as $56 at the beginning of the year and for about $30 at the end of November.

Goldman’s investment is being made through GS Capital Partners, a private equity arm of the firm. If the full amount is invested, it would convert into nearly 17 percent of First Marblehead’s shares.

However, GS will hold no more than 9.9 percent of First Marblehead’s voting shares at any one time, according to a First Marblehead press release.

Two other First Marblehead directors also have large stock holdings. William Berkley owned about 5 million shares, according to the company’s annual proxy statement dated Oct. 5. And co-founder and vice chairman Stephen Anbinder owned roughly 3 million shares.

According to insider filings, Alexander has not sold shares since last year. Berkley last sold in February. Anbinder has sold a total of more than 700,000 shares in regular trades this year, including some shares at $13.60 earlier this month.

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