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Finance Titans Vie for Leftovers of U.K.'s Subprime Poster Child

  • U.K. government selling $18 billion of Northern Rock mortgages
  • Goldman Sachs, JPMorgan, Morgan Stanley among possible bidders
The Morgan Stanley headquarters in New York City.

The Morgan Stanley headquarters in New York City.

hotographer: Daniel Acker/Bloomberg
Updated on

It is flotsam of the subprime age -- $18 billion of mortgages bundled into complex finance vehicles that crashed in value during the financial crisis. Now, more than seven years after Northern Rock Plc succumbed to the first British bank run in 140 years, some of the giants of global finance are vying for a piece of the action.

Their target is Granite, once one of Europe’s biggest sellers of mortgage-backed bonds, now controlled by a government unit holding assets of the U.K.’s failed lenders. The play: to buy the home loans and then generate lucrative fees by bundling the debt into investments via the Wall Street securitization machine.