BofA, Credit Suisse, Natixis Among Firms Financing Cerberus's $18B U.K. Mortgages Deal

Oct 22 2015 | 6:35pm ET

A consortium of five blue-chip investment firms are planning to finance Cerberus Capital Management’s $18 billion acquisition of U.K. mortgages that hearken back to the financial crisis.

Lloyds Banking Group, Morgan Stanley, Natixis, Bank of America and Credit Suisse are in discussions to back the deal, according to a Bloomberg article citing unnamed sources familiar with the matter. 

Cerberus was chosen as the winning bidder for the large tranche of mortgages from failed U.K. bank Northern Rock, which was nationalized during the crisis. Cerberus beat out other contenders such as JP Morgan Chase, Deutsche Bank and Citigroup for the deal.

The mortgage assets, which were packaged into Northern Trust’s Granite securitization vehicle, have generated strong interest from global investment banks attracted to their potential for anchoring asset-based instruments and generating lucrative fee income. U.K. Chancellor of the Exchequer George will reportedly use the proceeds from the sale to reduce his nation’s national debt.


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