UK Government Investments Limited (UKGI), today confirms that following an open and competitive sales process, UK Asset Resolution Limited (UKAR), the holding company for the government owned businesses of Bradford & Bingley plc (B&B) and NRAM Limited (NRAM), has agreed to sell two separate portfolios of mortgages from B&B to an investor group led by Barclays Bank PLC for £5.3bn.
There will be no changes to the terms and conditions of the mortgages involved in this transaction. Borrowers do not need to take any action and all those impacted will be contacted directly in due course to explain the change of ownership.
Financial completion is expected within the next few weeks with the total loan repayments to HM Treasury from the portfolio of mortgages amounting to £5.3 billion. This will include payment of the £4.7 billion balance outstanding to the Financial Services Compensation Scheme (FSCS) and follows a £10.9bn payment made in 2017, meaning the £15.65bn FSCS loan extended to B&B when it was nationalised in 2008 will have been repaid in full. The repayment of the FSCS loan will enable the FSCS to in turn repay its outstanding loan to HM Treasury to the benefit of UK taxpayers.
Today’s sale when complete will reduce UKAR’s balance sheet to £14.5bn, an 87% reduction since its formation in 2010, bringing total proceeds raised from UKAR asset sales in the last 3 years to over £30bn. This is in keeping with UKGI and UKAR’s overarching objective to develop and execute divestment strategies which protect and maximise value for the taxpayer whilst treating customers fairly.
Further information can be found in the HM Treasury and UKAR press releases:
Notes to Editors
- Following financial completion, UKAR’s balance sheet will have reduced from £116 billion to £14.5 billion since its formation in 2010.
- The mortgages in this transaction will be sold to two wholly-owned subsidiaries of Barclays Bank PLC with equity funding from funds managed by PIMCO.
- Debt financing has been made available to the purchasers by a group made up of Barclays Bank UK PLC, HSBC, Lloyds, Nationwide, NatWest Bank and Santander UK.
- UKGI were independently advised by Moelis on the divestment.