NEW YORK (Reuters) - Citigroup Inc <C.N> said it would sell Student Loan Corp <STU.N> to Discover Financial Services in a complicated deal that will reduce the bank's assets but also result in a $500 million charge this quarter.
Discover <DFS.N> is paying $600 million for Student Loan Corp, which is 80 percent owned by Citigroup. Just before the transaction closes, Student Loan Corp will sell $28 billion of assets to Sallie Mae <SLM.N> and $8.7 billion of assets to Citigroup.
Discover will end up with $4.2 billion of private student loan and related assets, which it is buying at a discount to their face value.
Student Loan Corp is also selling $4.7 billion of loans to the U.S. Department of Education in a separate transaction.
Citigroup's assets will be reduced by about $37 billion as a result of the transactions.
(Reporting by Dan Wilchins; Editing by Lisa Von Ahn)
