Close Close
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards
ThinkAdvisor

Life Health > Life Insurance

U.K. Raises $14.7 Billion in Blackstone-Prudential Mortgage Deal

X
Your article was successfully shared with the contacts you provided.

(Bloomberg) — The U.K. 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 The sale price for the loans, originally made by Bradford & Bingley, surpasses their fair value in UKAR’s accounts, he said.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 U.K. 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.

The U.K. Prudential, which is not related to Prudential Financial, is the parent of Jackson National, a major U.S. annuity issuer.

“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 U.K. 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 U.K. 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.

Bloomberg News reported last month that Blackstone and Prudential had been picked as the winning bidders.

— Read Our website and email newsletters are changing on ThinkAdvisor.


NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.