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RBS shifts Pendragon property loans to US group

RBS has sold a stake in £1.4 billion worth of its bad commercial property loans to the New York-based Blackstone Group, the Financial Times reported.

 

The portfolio comprises some 30 mortgages secured on car showrooms, nursing homes, pubs and garages, the largest of which was made to the major car dealer Pendragon.

This is cleaning up the books of the bank's "non-core" division, which is being hived off to Santander, and which contains £42 billion of property debt, according to the FT.

The portfolio includes performing, but high LTV debt, a fall-out from the opco-propco splits that seemed a good idea four years ago.

Rather than sell these loans outright or foreclose on breach of covenant RBS has done a deal which will allow the bank a share of future value creation and avoids a costly write-off.

 

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