Global investment giant Pimco is reportedly among the bidders looking to snap up the final tranche of taxpayer-owned customer loans issued in the wake of the financial crisis a decade ago.
The bond fund manager is eyeing a possible bid for the £5bn loan portfolio, according to Sky News, in a City sale that marks a milestone in the UK’s efforts to pull down the curtain on the legacies of the 2008 financial crash.
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Such loans, issued more than 10 years ago by Bradford & Bingley and Northern Rock, will be the final disposal carried out by UK Asset Resolution, the government-owned “bad bank” that was established after the 2008 crash.
Pimco has provided financing for previous UK Asset Resolution transactions, according to today’s reports in Sky News, which quoted business insiders as saying that the company could potentially team up with another financial transaction as part of the process.
A sale would allow the Treasury to sign off on the process of disposing its remaining interest in UK Asset Resolution before a self-imposed deadline in 2020. Hedge funds such as Cerberus Capital are also tipped to be interested in the deal.
A UKAR spokesperson said: “We have launched a transaction aimed at selling the legal entities of NRAM and B&B, along with their remaining assets, which would allow us to complete our objective and dispose of the government’s investment in these businesses.”
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They added: “Any eventual transaction would be subject to receiving assurances around the ongoing fair treatment of customers and maximising value for the taxpayer.”
An agreement is set to be reached by UK Asset Resolution and its advisers at Credit Suisse before the end of 2019.
Pimco declined to comment.