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Rothesay leads race for €900m UKAR loans

By Mark Kleinman, City editor
One of Britain's biggest specialist life insurers has emerged as the frontrunner to buy a ?900m mortgage portfolio from a Government agency, a decade after the state-backed bailout of Britain's banking sector.
Sky News has learnt that Rothesay Life, which was set up a decade ago, is the frontrunner to acquire the equity release mortgages from UK Asset Resolution (UKAR).
A deal, which could still be some weeks away, would mark a continuation of UKAR's efforts to shrink itself into non-existence, a process it hopes to conclude by 2021.When it was established, UKAR largely consisted of mortgage loans issued by Bradford & Bingley and Northern Rock, both of which had to be nationalised.The Treasury-backed agency said in June that it had launched a process to offload the equity release loans, which it added were "very different in nature to other loans on the book".
Rothesay leads race for €900m UKAR loans

Image:
Alistair Darling was chancellor at the time of the bank bailouts in 2008
Rothesay, which bought a €12bn annuity portfolio from Prudential earlier this year, is one of the leading pension derisking specialists in Britain, having struck deals with British Airways, Rank, RSA and the Post Office since it was set up in 2007.The pension risk transfer sector has exploded in terms of corporate demand in recent years as blue-chip companies have sought ways to insure their future retirement obligations.It was unclear on Thursday whether Rothesay was in a formal period of exclusivity to buy the UKAR loan book.In April, UKAR struck a €5bn deal to sell a portion of its portfolio to an investor group led by Barclays and which included Pimco, the world's biggest bond fund manager.Cerberus, the hedge fund, has also been a purchaser of UK crisis-era loans, acquiring a €13bn portfolio of securitised mortgages in November 2015.
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