The U.K. government is moving to the second stage in the sale of 13 billion pounds ($20 billion) in mortgage loans after closing first round bids.
“We expect round two of the process to start by the end of July,” UK Asset Resolution Ltd. Chief Executive Officer Richard Banks said in a telephone interview on Tuesday. “We’re pleased with the serious interest we’ve received. The transaction is progressing well.”
UKAR, formed out of collapsed lenders Bradford & Bingley Plc and Northern Rock Plc in 2010 after they were taken over by the state, is seeking to sell the assets held in a mortgage securitization vehicle known as Granite to recoup money for British taxpayers. Goldman Sachs Group Inc., Blackstone Group LP, Och-Ziff Capital Management and TPG are one group of bidders, according to people with knowledge of the matter.
Banks declined to comment on the bidders for the loans, saying the proposals “are being evaluated.”
“We would expect to move to a second round with a reduced number of bidders and then a final stage,” he said. The sale will be completed in the second quarter of 2016 at the earliest, he added.
UKAR made 3.7 billion pounds of loan repayments to the government in the year through March 31, bringing the total repaid to 14.1 billion pounds since it was formed, the company said in a statement on Tuesday. Pretax profit, excluding swings in the value of the lender’s own debt, rose 11 percent to 1.4 billion pounds from the period a year earlier.
The balance sheet shrank by 8.8 billion pounds in the year, bringing the total reduction to 49.7 billion pounds, down 43 percent, since the company was established.