Analyst to Sallie Mae's Albert Lord: But You're the CEO!

Just finished reading the transcript of the Sallie Mae/SLM Corporation conference call. Amazing! This has to be the most remarkable Q&A and call conclusion I've ever seen:

Question-and-Answer Session

Operator

(Operator Instructions) Our first question comes from Jason Miller. Your line is open, sir.

Jason Miller

Yes, I wanted to ask -- you’re going to shore up the balance sheet. Does that mean you are going to be selling equity?

Albert L. Lord

The most preferred type of equity is common equity. I’m not going to -- at this point, I’m not going to get very precise with you. The idea is to strengthen the equity, the capital count with financing somewhere beneath the long-term credit lines.

Jason Miller

Do you think you’d need to raise capital to get back to the credit rating you would like, and what are your thoughts about the dividend?

Albert L. Lord

All right. This is the last question I answer that’s more than one part. We will look at the dividend in the second half of the year.

Jason Miller

Okay.

Albert L. Lord

Thank you.

Jason Miller

And you didn’t mention how much equity you were going to need to get back up to the single A rating.

Albert L. Lord

You’re talking to the wrong guy. I don’t know that answer.

Jason Miller

Thank you.

Operator

Our next question is from Bill Cavalier.

Bill Cavalier—Société Genéralé

Can you talk a little bit about the pass-through market? Clearly there’s pretty much no appetite for student loan paper at this point. What are you being told about when you think there will be a market for your pass-through notes so that we can start to --

Albert L. Lord

You’re talking about our securitizations, I assume? Look, we’ve not been -- we’ve not done as much as we’d like to do. We’d like to doall of our current production and actually liquidate even some of our inventory but we’ve done a securitization this month. We did a securitization in several preceding months. They’ve been maybe 60%, 70% of what we wanted to do.

My own view, and this is where I usually get in trouble, but my own view is that that market -- that, along with a lot of other markets, is shut down for the year 2007 until people take a look at their 12/31 balance sheets and figure out what they are doing. But I don’t have the bottom line answer to your question.

Bill Cavalier—Société Genéralé

Okay, but clearly you’ve been talking to the arranging banks and they must be telling you something.

Albert L. Lord

I’m not sure what you’re talking about. I’ve been talking to whom?

Bill Cavalier—Société Genéralé

When you do a securitization, you have a bank that arranges -- that actually does the arranging, right? You have an arranging bank and somebody must be telling you something about what the market is looking like, what their expectations are for next year. We’re trying to put together projections here, Al. We’re trying to make -- we’re trying to figure out what your stock is going to be worth and you’ve got to give us some guidance, you’ve got to give us some numbers. I don’t even seea margin number here for the stuff that you’ve done. Can you give us some handle on what your stock is worth?

Albert L. Lord

You should give Steve a call.

Bill Cavalier—Société Genéralé

But you’re the CEO. You’re the guy who just took over the company.

Albert L. Lord

Yeah, that’s exactly right. I’m the CEO. You should give Steve a call. Next question.

And later, the grand finale of the call:

Operator

(Operator Instructions -- then no more questions)

Albert L. Lord

How good is this? Steve, let’s go. There’s no -- no questions. Let’s get the fuck out of here.

Steve McGarry

Okay, Hilary, if there are no more questions, we’ll end the call. Thank you, everybody for tuning in and if you do have follow-up questions, please feel free to call myself or Joe Fischer. Thank you. That ends the call.

No surprise that Felix Salmon thinks Albert Lord is on "deathwatch".

Have any other conference calls equalled this one? If you know of one, leave a comment below.

Comments

[Long-ShortGuy]

Maybe some of Patrick Byrne's Overstock conf calls?

[User 132193]

MR. LORD took sells 35 million in stock on Dec 14. Do you think he knew when to sell?? 4 days before the stock dives he sells?? Martha was imprisoned for $186,000 in imclone stock. Bullshit on him.. Mozilo (cfc) the same thing. What the hell?? It makes it hard as a small investor to trust anyone!!

[James Cullen]

Not sure of links, but when Dan Loeb would get on calls with PDL Biopharma (PDLI) management, he doled out some pretty good shots.

One I remember was the Board Chair asking Loeb if he had any questions, to which Loeb responded with something along the lines of "how do you look at yourself in the mirror every morning?"