Fund manager Pimco close to £5bn deal for Bradford & Bingley mortgage book
The UK government is close to selling a £5bn Bradford & Bingley mortgage book to a major bond fund manager, it has been reported.
Bradford & Bingley’s loan book was nationalised in 2008 at the height of the financial crisis.
UK Asset Resolution (UKAR), the government body set up to manage nationalised banking assets, could agree to sell a £5bn tranche of loans as early as Wednesday.
Read more: Another £5.5bn worth of taxpayer-owned loans is closer to being sold
Sky News reports that bond fund manager Pacific Investment Management Co (Pimco) is set to sign an agreement to buy the loan book this week.
According to the report hedge funds Och-Ziff, Cerberus Capital Management and M&G Prudential had also been shortlisted to buy the portfolio.
Read more: Government sells B&B loans to Prudential and Blackstone for £11.8bn
Last year the government sold £11.8bn of Bradford & Bingley loans to insurance giant Prudential and US private equity fund Blackstone.
US private equity firm Cerberus picked up a £13bn block of mortgages in 2015.
The treasury announced that it would be kicking off the sale off £16bn of Bradford & Bingley loans in 2016.
The move was part of an effort to repay a £15.65bn debt to the Financial Services Compensation Scheme (FSCS).
The upcoming sale will be used to pay the outstanding £4.7bn due to the FSCS.
Pimco and UKAR declined to comment.