Friday, November 13, 2015

£13BN of Northern Rock Mortgages Sold To US

The Government has sold £13bn of the mortgage assets it acquired after rescuing Northern Rock during the financial crisis.

The mortgages have been sold by UK Asset Resolution (UKAR) to US private equity firm Cerberus.

A total of 120,000 residential mortgages are included in the transaction, with an average outstanding balance of roughly £100,000.

The Treasury said in a statement that UKAR had sold the mortgages for £280m more than their book value. The sale means UKAR can pay back £5.5bn of its loan from the government.

Given how banks repackage debt and sell it on (the cause of the last banking crisis), we should not be surprised to see these debts back on the books of a British bank in the coming years.

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