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Purchase of distressed assets by Cerberus Capital Management.

Published Friday, February 17, 2017

Purchase of distressed assets by Cerberus Capital Management.

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Purchase of distressed assets by Cerberus Capital Management

George Kerevan will introduce a two hour Westminster Hall debate about the role played by this financial group in the restructuring of the nationalised assets of UK banks following the financial crash of 2007.  This issue has been returned to on numerous ocassions by the Treasury Select Committee.  It focuses particularly on the purchase of the assets of the previous Northern Rock Bank.

The sale was looked at by the National Audit Office who commented that:

In November 2015 the government disposed of £13.3 billion former Northern Rock mortgages and loans to a consortium led by US private equity group, Cerberus. According to a report today by the National Audit Office, when judged against the Government’s objective to shrink the balance sheet swiftly the deal was value for money. This transaction represents the government’s largest-ever financial asset sale.

The sale, conducted by the UK Asset Resolution (UKAR) which is owned by HM Treasury, comprised of £11.9 billion of mortgages from the Granite debt financing vehicle within Northern Rock Asset Management (NRAM) and additional loans (£1.4 billion). The taxpayer received £5.5 billion in cash while Cerberus took on nearly £8 billion in liabilities. Some 270,000 mortgages and loans were sold in the deal.

The NAO Report can be found here.

The Library will produce a briefing or material for the debate and this page will be updated when it is made available. You can be notified when this takes place by emailing papers@parliament.uk.

Commons Debate packs CDP-2017-0052

Author: Tim Edmonds

Topics: Financial institutions, Financial services

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