(Bloomberg) -- GoldenTree Asset Management agreed to buy a portfolio equivalent to about €800 million ($872 million) of UK consumer loans from Bank of Ireland Group Plc, according to people familiar with the matter.
Citigroup Inc. is arranging financing for the deal through a securitization using the Bank of Ireland loans as collateral, said the people, who asked not be identified because the matter is private. The asset-backed deal will be carved into varying portions, said the people. GoldenTree’s managed funds intend to buy the junior part while Citigroup will arrange the rest of the transaction, the people said.
Representatives for GoldenTree, Citigroup, Bank of Ireland and Morgan Stanley, which advised the Dublin-based lender on the sale, declined to comment.
The transaction was agreed last month, the Bank of Ireland said in its latest earnings report released Oct. 30. The bank’s Core Equity Tier 1 ratio was 15.6%, above the 14.8% estimate by a consensus of analysts compiled by Bloomberg.
The lender has been retreating from consumer lending in the UK. It stopped providing personal loans and mortgages through a partnership with the UK Post Office and ended a loan venture with the motoring services group the AA at the end of last year.
GoldenTree also won a competitive process related to a sale of €4.1 billion of Italian home loans originated by Barclays Plc earlier this year. The transaction was also funded by a securitization deal.
(Updates with capital ratio, a previous version corrected currency conversion)
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