Linklaters, Slaughter and May, Allen & Overy (A&O) and Hogan Lovells landed major roles in November advising on the government’s record-breaking £13bn sale of former Northern Rock mortgages, acquired during the financial crisis.
In what was the largest-ever financial asset sale by a government in Europe, the mortgages originally owned by Northern Rock were sold by the Treasury-owned UK Asset Resolution (UKAR) – set up to look after the mortgages nationalised when Northern Rock and Bradford & Bingley ran into difficulty in 2008 – to Cerberus Capital Management.
Following a competitive bid process, UKAR sold the portfolio for £280m more than its book value. UKAR said taxpayers will get back more money from Northern Rock than they were ‘forced to put in during the financial crisis’ and the sale means the government has disposed of over 85% of the assets of the former bank. All proceeds will be used to pay down the national debt.
Slaughters advised UKAR with a team led by finance partner Guy O’Keefe and corporate finance partner Craig Cleaver. The City law firm had previously advised the Treasury, its longstanding client, on the transfer of Northern Rock and Bradford & Bingley into public ownership in 2008.
Linklaters advised Cerberus with a team led by structured finance partner Adam Fogarty and corporate partner Tracey Lochhead.
A&O advised the financing banks; Bank of America, Credit Suisse, Morgan Stanley, Lloyds Bank and Natixis, on the agreement by Cerberus to acquire the mortgages from UK Financial Investments, which manages the Treasury’s 100% share in UKAR. The team was led by securitisation partner Salim Nathoo, and included banking partners Trevor Borthwick and Ian Powell, corporate partner Annabelle Croker, real estate partner Daniel McKimm and tax partner Lydia Challen.
Nathoo said the transaction was ‘significant in the post-financial crisis world. It provides premium-to-book value for both the government and UK taxpayers, but also highlights growing demand for assets and confidence in the market’.
A&O was supported by Shepherd and Wedderburn, which led on Scots law aspects with a team led by partner Hamish Patrick.
Cerberus is subsequently selling on £3.3bn of the portfolio to TSB Bank, advised by Hogan Lovells with a London-based team led by partners John Allison, Jonathan Chertkow and Rachel Kent.
sarah.downey@legalease.co.uk