Clifford Chance and Allen & Overy advise on government's £2.7bn 'bad bank' mortgage sale
Clifford Chance (CC) and Allen & Overy (A&O) have won the leading roles on the UK government's disposal of £2.7bn of 'bad bank' mortgages to a consortium led by JP Morgan.
October 22, 2014 at 07:26 PM
2 minute read
Clifford Chance (CC) and Allen & Overy (A&O) have won the leading roles on the UK government's disposal of £2.7bn of 'bad bank' mortgages to a consortium led by JP Morgan.
UK Asset Resolution (UKAR), which is responsible for winding down £75bn of historic loans from failed banks Northern Rock and Bradford & Bingley, offloaded 27,000 residential mortgages in what is thought to be the holding company's largest asset sale since its establishment in 2010.
The holding company was put together by the government after Northern Rock and Bradford & Bingley were nationalised during the 2008 financial crisis.
The disposal is CC's first mandate for UKAR after winning the role through a competitive tender process. CC fielded a team fronted by real estate finance partner Emma Matebalavu, tax partner Chris Davies and employment partner Alistair Woodland.
JP Morgan, which led the consortium for North Yorkshire-based specialist lender Commercial First, instructed A&O on the purchase. The magic circle firm's team was led by real estate partner Daniel McKimm and finance partner Sally Onions.
CC's Matebalavu said: "The peculiarity of acting for UKAR on this deal is that the portfolio is of performing assets and the sale was designed to maximise the return to taxpayers, but it is consistent with the overall theme of banks reducing their balance sheets by disposing of assets.
"We are seeing a high volume of portfolio disposals across Europe and anticipate that the European Central Bank's upcoming asset quality review may lead to an increase in this."
The transfer of the mortgage loans to the consortium will be phased over the next 12 months.
In 2008 Herbert Smith, Freshfields Bruckhaus Deringer, Slaughter and May and Ashurst landed the main roles on the £40bn nationalisation of Bradford & Bingley.
The mandates followed Northern Rock's nationalisation in the same year, which saw Slaughter and May take the headline role advising the Treasury.
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