UK Government Investments (UKGI) today confirms that following an open and competitive sales process, UK Asset Resolution Limited (UKAR) has agreed to sell two portfolios of owner-occupied mortgages and unsecured loans for a total of £4.9 billion.
UKAR, the holding company for the government-owned businesses of Bradford & Bingley plc (B&B) and NRAM Limited (NRAM), will sell the loans to Citi, an investment bank, while the majority of financing is being provided by PIMCO, a bond manager.
The proceeds of the sale will enable full repayment of the outstanding loans provided by HM Treasury to NRAM and B&B during the financial crisis, making further progress towards the final wind-down of these companies.
A key element in selecting the successful bidder was the treatment of customers. All bidders were required to agree to a non-negotiable package of customer protections before their bid was considered.
There will be no changes to the terms and conditions of the mortgages sold and borrowers will have the same protections they currently receive under UKAR’s ownership. Borrowers will be contacted directly in due course to explain the change of ownership.
Following the transaction, UKAR will own £8 billion of assets, down from £14 billion in September 2018 and from £116 billion in 2010.
Notes to Editors:
UKGI was independently advised by Moelis on the divestment.