Bradford & Bingley plc (B&B), part of UK Asset Resolution (UKAR), today confirms that following an open and competitive process it has agreed to sell two separate asset portfolios comprising performing buy to let loans for a total of £11.8bn to Prudential plc and to funds managed by Blackstone.
Financial completion is expected within the next few weeks and will enable total loan repayments to HM Treasury of £11.8bn including £10.9bn of the £15.65bn Financial Services Compensation Scheme (FSCS) loan. The price achieved is at the upper end of expectations, delivers value for the taxpayer and compares favourably with the ‘fair value’ of the B&B loan book disclosed in B&B’s accounts last year. The fair value of the B&B loan book is less than its book value, reflecting the low interest rates payable on the loans.
A key consideration for this sale was the continued fair treatment of borrowers and there will be no changes to the terms and conditions of the buy to let loans involved in this transaction. Borrowers do not need to take any action at this time and all those impacted will be contacted in due course to explain the change in ownership.
Subject to market conditions and taxpayer value, and in order to repay the remainder of the FSCS loan in full by March 2018, we expect to launch the next phase of the programme of sales later this year.
Ian Hares, Chief Executive Officer, commented: “This sale of assets is a significant milestone in the phased repayment of the FSCS loan extended to Bradford & Bingley and when complete will reduce UKAR’s balance sheet to £22bn from £116bn in 2010 when it was formed. We are very pleased with the price achieved which delivers excellent value for the taxpayer. The transaction delivers against our overarching objective to develop and execute divestment strategies which protect and maximise value for the taxpayer whilst treating customers fairly.”