Trio of firms pick up $5.8bn GE loan book

Blackstone, TSSP and CarVal have agreed to buy roughly $5.8 billion in mortgage loans from GE Capital’s UK Home Lending business, as GE prepares to exit the market.

General Electric (GE) has agreed to sell a $5.8 billion par value portfolio of first-lien mortgage loans from its UK Home Lending business.

A consortium of funds managed by Blackstone, TPG Special Situations Partners (TSSP) and CarVal Investors is in line to buy the loans, GE announced on the New York Stock Exchange (NYSE). The transaction is expected to close in December 2015.

GE has sold almost all of its remaining UK mortgage business as a result of GE Capital sell off, Keith Sherin, GE Capital chairman and chief executive, said.

“We began this year with around US$13 billion of ENI [ending net investment] and when this transaction closes, we will have approximately $400 million 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,” Sherin said.

GE announced in April this year that it would shed most of its lending business, GE Capital, and streamline its focus to the financing verticals related to its core industrial businesses.

When completed, the latest sale of its UK mortgage loans to the private equity firms will contribute around $400 million of capital to the overall target of $35 billion of dividends expected to be paid to the NYSE-listed GE.

In total, the combined sales of the UK Home Lending portfolios including this latest transaction will contribute $1 billion of capital to the target. Total ENI for 2015 announced sales is around $136 billion.