The Gulf Time Newspaper One of the finest business newspapers in the UAE brought to you by our professional writers and editors.
Bloomberg
The UK will raise 11.8 billion pounds ($14.7 billion) selling mortgages to Blackstone Group LP funds and Prudential Plc, as it takes another step toward clearing assets acquired from lenders that failed in the financial crisis.
“This is a significant milestone,†Ian Hares, chief executive officer of UK Asset Resolution Ltd., the state agency that managed the sale, said on a call with reporters on Friday. The sale price for the loans, originally made by Bradford & Bingley, surpasses their fair value in UKAR’s accounts, he said.
The deal is probably the last major disposal of mortgages from UK lenders nationalized during the 2008 financial crisis and forms part of the government’s push to raise funds by offloading bailed-out banking assets. Blackstone and London-based Prudential won a months-long bidding process for the loans, seeing off competitors including Cerberus Capital Management, CarVal Investors LLC and Elliott Management Corp.
“We are determined to return the financial assets we own to the private sector and today’s sale is further proof of the confidence investors have in the UK economy,†Chancellor of the Exchequer Philip Hammond said
in a statement.
The loans were sold for less than their book value of 12.2 billion pounds, reflecting the low interest rates payable, according to the statement. The deal cuts UK Asset Resolution’s balance sheet to 22 billion pounds, down from 37 billion pounds in September and from 116 billion pounds in 2010, it said.