Barclays Venture Agrees to Buy $7.4 Billion of U.K. Mortgages

(Bloomberg) -- An investor group led by Barclays Plc agreed to acquire 5.3 billion pounds ($7.4 billion) of mortgages from the government agency overseeing nationalized lenders.

The deal is expected to be completed within weeks and Pacific Investment Management Co. is providing funding for the deal, U.K. Asset Resolution Ltd. said in a statement. The mortgages were originally advanced by lenders including Bradford & Bingley Plc, which collapsed during the financial crisis.

The U.K. government has increased the sales of multi-billion-pound mortgage books since late 2015 as the real estate market recovers and to help pare state borrowing. The sale means that loans given to Bradford & Bingley when it was taken over by the state in 2008 will have been repaid in full. Once the deal is completed, UKAR’s balance sheet will have shrunk 87 percent since it was formed to manage the failed lenders.

Barclays, HSBC Holdings Plc, Lloyds Banking Group Plc, Nationwide Building Society, a unit of Royal Bank of Scotland Group and Banco Santander SA have committed to buying bonds to help finance the acquisition.

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