The UK government has agreed to sell off the £13 billion of former Northern Rock mortgages acquired by taxpayers during the financial crisis.
In what is believed to be largest ever financial asset sale by a government in Europe, the portfolio is being sold by UK Asset Resolution (UKAR) to US investment firm Cerberus.
UKAR was the “bad bank” created in 2010 to run down the loans in Northern Rock and Bradford & Bingley.
The mortgages are being sold for £280 million more than their book value, which the government said demonstrated “the strength of global investors’ interest in the UK.”
TSB Bank also confirmed that it had acquired £3.3 billion of former Northern Rock mortgages and loans from Cerberus in a deal that see it become the mortgage lender for 34,000 homeowners.
Chancellor George Osborne said that taxpayers will get back more money from Northern Rock than they were forced to put in during the financial crisis.
Osborne said: “Today marks another major milestone in clearing up the mess left by the financial crisis, with the sale of former Northern Rock mortgages.
“The highly competitive process, unprecedented scale, and the fact that these mortgages have been sold for almost £300 million more than their book value demonstrates the confidence investors have in the UK, which has only been made possible by the success of our long term plan.”
The government has now sold over 85% of the assets of the former bank. All proceeds will be used to pay down the national debt.
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