Sallie Mae (SLM) on Monday said it was dropping its lawsuit over a failed $25 billion buyout deal, as two of the participants in the scuttled transaction teamed with other banks to extend $31 billion in credit to the student lender.
Bank of America (BAC - Get Report) and JPMorgan Chase (JPM - Get Report), who were part of a consortium led by private-equity firm J.C. Flowers & Co., led a group of its peers in extending $31 billion in credit good for up to a year.
The funding replaces $30 billion in interim financing the banks would have put in place under the failed deal. Barclays (BCS), Deutche Bank (DB - Get Report), Credit Suisse (CS - Get Report), Royal Bank of Scotland (RBS - Get Report) and UBS (UBS) also teamed in the effort.
Sallie Mae has struggled in recent months amid the lingering credit crunch. The lender last week