GE has signed an agreement to sell a portfolio of first lien mortgage loans from its UK Home Lending business, representing aggregate ending net investment (ENI) of approximately US$5.8 billion, to an investment consortium made up of opportunistic funds managed by Blackstone, TPG Special Situations Partners (TSSP), and CarVal Investors. The loans have a face value, or customer servicing balance of US$5.9/£3.8 billion. The transaction is expected to close in December 2015; terms were not disclosed.
“This transaction represents the sale of almost all our remaining UK mortgage business, which successfully provided financing for UK home owners,” said Keith Sherin, GE Capital chairman and CEO. “We began this year with around US$13 billion of ENI and when this transaction closes, we will have approximately US$0.4 billion of ENI remaining in our UK mortgage business. This is an important step as we continue to execute on our plan to sell most of the assets of GE Capital.”
As previously announced, GE is embarking on a strategy to focus on its high-value industrial businesses and is selling most GE Capital assets. GE and its Board of Directors have determined that current market conditions are favorable to pursue disposition of these assets. GE will retain the financing verticals that relate to GE’s industrial businesses.
When completed, this transaction will contribute approximately US$0.4 billion of capital to the overall target of approximately US$35 billion of dividends expected to be paid to GE under this plan (subject to regulatory approval). In total, the combined sales of the UK Home Lending portfolios, including this transaction, will contribute nearly US$1 billion of capital to the target. With the transaction, the total ENI for 2015 announced sales is about US$136 billion.
“We are pleased with the progress we are making to reach and close agreements for our businesses and assets. The speed and value we have achieved is a testament to the hard work of our GE Capital teams around the world,” concluded Sherin.
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This document includes certain forward-looking projected financial information that is based on current estimates and forecasts. Actual results could differ materially.
Matt Cribbins, +1 203 373 2424, matthewg.cribbins[.]ge.com
GE: Seth Martin, P: +1 203-572-3567 - E: seth.martin[.]ge.com.
Blackstone: Andrew Dowler, P: +44(0)20 7451 4275 - E: andrew.dowler[.]blackstone.com.
TPG: Luke Barrett, P: +1 212-601-4752 - E: lbarrett[.]tpg.com.
CarVal: Ann Folkman, P: +1 952-984-3919 - E: ann.folkman[.]carval.com.