LONDON: Cerberus Capital Management LP bought 13 billion pounds ($19.8 billion) of mortgages from the U.K. government and sold some of them on to TSB Banking Group Plc as Chancellor of the Exchequer George Osborne winds down the remnants of Northern Rock Plc to cut the nation’s debt.
The U.S. private equity firm won a six-month bidding process for the home loans, part of the so-called Granite securitization portfolio, UK Asset Resolution Ltd., which oversees the remaining assets of Britain’s bailed-out lenders, said in an e-mailed statement. Proceeds of the sale included a premium of about 280 million pounds over book value and will help UKAR repay 5.5 billion pounds to the British government.
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“Today marks another major milestone in clearing up the mess left by the financial crisis,” Osborne said in a separate statement on Friday. “The sale, which raises 13 billion pounds for the British taxpayer, is the largest ever sale of financial assets by a British government, and we are now clear that taxpayers will get back more money from Northern Rock than they were forced to put in during the financial crisis.”
Cerberus agreed to sell 3.3 billion pounds of the assets to TSB, the U.K. lender acquired by Spain’s Banco de Sabadell SA earlier this year.
