Northern Rock sells equity release mortgages portfolio
Beleaguered mortgage lender Northern Rock has agreed to sell its portfolio of Lifetime home equity release mortgages to US investment bank JP Morgan.
It said the price achieved represents a premium of 2.25%, or about Ј50m, over the balance sheet value of the portfolio.
The Lifetime Portfolio comprises gross assets with a balance sheet value of Ј2.2bn, representing around 2% of the group’s total assets at 30 June 2007 easy payday loans.
The proceeds from the cash deal will be used to reduce the firm’s current funding from the Bank of England, said the Newcastle-based firm.
“The board considers that this sale of a discrete portfolio of assets is in the best interests of shareholders and is consistent with the scope of the company’s ongoing strategic review,” it added.
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