Business World

Sunday 18 August 2019

Cerberus acquires €18bn Northern Rock mortgage portfolio

A Northern Rock bank branch is pictured in London
A Northern Rock bank branch is pictured in London

US private investment company Cerberus Capital Management has acquired a £13bn (€18.4bn) portfolio of mortgages from the former UK bank Northern Rock, which was bailed out by the UK taxpayer.

The assets were sold by UK Asset Resolution (UKAR), Britain's so-called bad bank which has been winding down the loans of Northern Rock, which collapsed in 2007 and was nationalised by the British government.

UK finance minister George Osborne said in a statement that the mortgages went for more than £280m than their book value and the proceeds would be used to pay down national debt.

The sale by the UK Treasury marks the largest ever financial asset sale by a European government.

In a statement Cerberus said affiliates of the firm "have entered into a definitive agreement to acquire a portfolio of mortgage loans and other loan assets from UK Asset Resolution Limited".

Cerberus chairman John W. Snow said: "Cerberus is pleased that, after a lengthy and thorough process, UK Asset Resolution Limited selected Cerberus as the acquirer of this significant portfolio of mortgage loans.

"This portfolio is an important addition for Cerberus and further demonstrates our commitment to our European mortgage and real estate investment strategy."

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