The five-year notes, set to be issued as soon as today, may yield 6.5 percent, according to a person familiar with the transaction. The company last tapped the corporate bond market in March, according to data compiled by Bloomberg.

Sallie Mae is revamping its business after the U.S. government stopped using private lenders to make loans through the Federal Family Education Loan Program. Shares of the Reston, Virginia-based lender are at the highest level since September 2008, while the cost to protect its debt from default fell last week to the lowest since May of that year.

“As access to the credit markets has improved for a range of companies, liquidity risks such as Sallie Mae’s have become less substantial,” said Guy LeBas, chief fixed-income strategist and economist at Janney Montgomery Scott LLC in Philadelphia.

Sallie Mae has $4.8 billion of bonds maturing this year, $2.2 billion in 2012, $2.5 billion the following year and $4.3 billion in 2014, Bloomberg data show.

Improved access to the bond market and a change in Sallie Mae’s business model reduces the risk it won’t be able to refinance debt, said LeBas.

‘Shrinking Balance’

“In the long run, they plan on acting not so much as a lender, but a loans servicer,” he said. “It would decrease the need for financing so it implies a shrinking balance sheet in future years.”

Credit-default swaps on Sallie Mae have declined to 331.2 basis points from 787.1 basis points in August, according to data provider CMA. The contracts fell to 313.3 on Jan. 6, the lowest since May 2, 2008.

Credit swaps pay the buyer face value if a borrower fails to meet its obligations, less the value of the defaulted debt. A basis point, 0.01 percentage point, equals $1,000 annually on a contract protecting $10 million of debt.

Sallie Mae shares rose 48 cents, or 3.6 percent, to $13.82 as of 3:21 p.m. in New York Stock Exchange composite trading. That’s the highest since Sept. 26, 2008.

‘Playing Defense’

Sallie Mae issued $1.5 billion of 8 percent, 10-year notes, priced at 98.32 cents on the dollar last March, Bloomberg data show. The notes, which tumbled to as low as 86.25 cents in May, traded yesterday at 102.9 cents to yield 7.554 percent, or a spread of 424.5 basis points, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.

That was the company’s first unsecured bond offering since 2008, Bloomberg data show.

“We’ve been waiting for Sallie Mae to reenter the unsecured debt markets,” said Matt Snowling, an analyst with Arlington, Virginia-based FBR Capital Markets. “This is important because it’s going to be viewed as freeing up liquidity so the company can go back on offense rather than playing defense.”

Martha Holler, a spokeswoman for Sallie Mae, didn’t immediately return a call seeking comment.

Sallie Mae’s notes may be rated Ba1 by Moody’s Investors Service and a step higher at BBB-minus by Standard & Poor’s, said the person, who declined to be identified because terms aren’t set.

The average BB rated bond yields 6.38 percent, according to Bank of America Merrill Lynch index data.

Outstanding Debt

The lender’s outstanding 8.45 percent notes due in June 2018 traded yesterday at 106 cents on the dollar to yield 7.38 percent, or a spread of 408.4 basis points, Trace data show.

“It is more than likely they are going to be issuing this debt at a higher cost than the debt they are retiring,” Snowling said of today’s bond offering. “They just need to re-establish their presence in debt markets.”

The lender originated $835 million in non-government guaranteed loans during the third quarter, and serviced about 2.5 million accounts on behalf of the U.S. government and other third party accounts, according to an Oct. 19 statement.