UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) August 27, 2007
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Nelnet, Inc.
(Exact name of registrant as specified in its charter)
Nebraska 001-31924 84-0748903
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(State of other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
121 South 13th Street, Suite 201, Lincoln, Nebraska 68508
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(Address of principal executive offices) (ZipCode)
Registrant's telephone number, including area code (402) 458-2303
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Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act(17 CFR 240.13e-4(c))
ITEM 2.03. CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER
AN OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT
On August 27, 2007, Nelnet Student Loan Trust 2007-2 (the "Trust"),
issued an aggregate principal amount of $1,500,000,000 of its Student Loan
Asset-Backed Notes (the "Notes"), pursuant to an Indenture of Trust dated as of
August 1, 2007 (the "Indenture"), between the Trust, as issuer, and Zions First
National Bank, as indenture trustee (the "Indenture Trustee") and as eligible
lender trustee.
Nelnet Student Loan Funding, LLC ("Nelnet Funding") is the depositor and
initial certificateholder of the Trust. Nelnet Funding and Nelnet Education Loan
Funding, Inc. ("NELF") are wholly owned subsidiaries of National Education Loan
Network, Inc. ("NELN"), which is a wholly owned subsidiary of Nelnet, Inc.
("Nelnet").
The offering of the notes was conducted pursuant to a Note Purchase
Agreement, dated August 22, 2007, among Nelnet Funding and Banc of America
Securities LLC and Citigroup Global Markets Inc., acting on their own behalf and
as representatives of the other initial purchasers.
The Trust used approximately $1,426,728,013 of the net proceeds from the
sale of the Notes to purchase student loans originated under the Federal Family
Education Loan Program from Nelnet Funding. The student loans the Trust acquired
were purchased by Nelnet Funding from NELF and Union Bank and Trust Company, an
affiliate of Nelnet. The Notes will receive payments of interest and principal
in accordance with the Indenture primarily from collections made on the student
loans acquired by the Trust. The obligations to pay principal and interest on
the Notes are solely the obligations of the Trust. For financial accounting
purposes, the Notes will be reflected as long-term indebtedness of Nelnet on a
consolidated basis.
The aggregate principal amount of the Notes issued is $1,500,000,000, of
which $181,000,000 are designated as class A-1L notes, $567,000,000 are
designated as class A-2L notes, $570,000,000 are designated as class A-3L notes
(together with the class A-1L notes and the class A-2L notes, the "LIBOR Rate
Notes"), $53,500,000 are designated as class A-4AR-1 notes, $53,500,000 are
designated as class A-4AR-2 notes, $37,500,000 are designated as class B-1
notes, and $37,500,000 are designated as class B-2 notes (together with the
class A-4AR-1 notes, the class A-4AR-2 notes, and the class B-1 notes, the
"Auction Rate Notes").
The Class A-1L Notes will have an interest rate on the principal amount
equal to three-month LIBOR plus a margin and have a final maturity date of
September 25, 2013, the Class A-2L Notes will have an interest rate on the
principal amount equal to three-month LIBOR plus a margin and have a final
maturity date of September 25, 2018, and the Class A-3L Notes will have an
interest rate on the principal amount equal to three-month LIBOR plus a margin
and have a final maturity date of March 25, 2026. The LIBOR Rate Notes have been
rated AAA by Standard & Poor's and Fitch and Aaa by Moody's. The LIBOR Rate
Notes will receive quarterly distributions on the 25th day of each March, June,
September and December, or if such day is not a business day, the next business
day, beginning on December 26, 2007.
The Auction Rate Notes will bear interest based on auctions in
accordance with the auction procedures set forth in the Indenture. The class
A-4AR notes have a final maturity date of June 25, 2035 and have been rated AAA
by Standard & Poor's and Fitch and Aaa by Moody's. The class B notes have a
final maturity date of September 25, 2035 and have been rated A by Standard &
Poor's and Fitch and A2 by Moody's. Each class of Auction Rate Notes will
receive distributions on the business day following the end of the auction
period for such class of Auction Rate Notes.
The class B notes are subordinate to the class A notes. The Trust will
make principal payments or redemptions on the Notes sequentially on the class
A-1 notes through the class A-4 notes, until paid in full. The class B notes
will not receive principal payments until the step-down date, which shall be the
earlier of the September 2013 quarterly distribution date or the first date on
which no class A notes remain outstanding. After the step-down date, the class B
notes will be allocated principal on a pro rata basis with the class A notes, so
long as certain trigger events have not occurred.
The principal amount of the Notes will be payable earlier if an event of
default occurs under the Indenture that results in the acceleration of the
maturity of the Notes. Each class of Auction Rate Notes is also subject to
optional redemption on its auction rate distribution date from available funds
in the trust estate, subject to certain conditions. In addition, the maturity of
any class of Note may occur earlier if, in accordance with the terms and
conditions of the Indenture, there are prepayments on the student loans held in
the trust estate, Nelnet Funding exercises its option to purchase all of the
student loans remaining in the trust estate, or the Indenture Trustee auctions
all of the remaining student loans.
The Notes have not been, and will not be, registered under the
Securities Act of 1933, as amended (the "Act"), and may not be offered or sold
absent registration or an applicable exemption from registration requirements.
The Notes are being offered and sold only to Qualified Institutional Buyers with
the meaning of Rule 144A under the Act and non-U.S. persons in offshore
transactions in reliance on Regulation S under the Act. This Current Report on
Form 8-K does not constitute an offer to sell or the solicitation of an offer to
purchase the Notes.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: August 29, 2007
NELNET, INC.
By: /s/ TERRY J. HEIMES
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Name: Terry J. Heimes
Title: Chief Financial Officer