As part of its strategy of reducing “non-core” assets, UK investments giant, Lloyds Banking Group, announced it successfully sold its portfolio of U.S. residential mortgage-backed securities.
The deal shows a clear return to risk from institutional investors. Goldman Sachs, it should be noted, was a named buyer, for example.
The book value of the deal, worth nearly $5 billion, represents a substantial portion of its larger sell-off of U.S. securities holdings.
According to Lloyds, the assets hold a book value of approximately $4.4 billion and as a result of the transaction Lloyds posted a pre-tax gain of approximately $1.23 billion.
“The sale proceeds will be used for general corporate purposes,” the bank said in a release.
Lloyds pension scheme also sold its share of another portfolio of U.S. RMBS with a book value of $1.2 billion.
The transaction is expected to be finalized in the first week of June.
The offloading is the result of Lloyds being required to do so after receiving government funding in 2009.
jgaffney@housingwire.com
