Northern Rock Increase Sales Of Commercial Loans

Fri, 24 Aug 2007

Northern Rock Plc announced the sale of £465 million commercial loans on Monday, which according to the bank was achieved at the expected price despite recent credit market mayhem.

The bank stated that the sale of the commercial loans, which were to a unit of Lehman Brothers, was in line with its strategy announced on June 27 - to sell-on higher risk commercial loans, instead of keeping them on its own book .

In June the company sold £838 million commercial loans to Lehman Brothers and said it had conditionally agreed to sell up to a further £732 million worth of such loans .

A spokesman for the bank said the amount sold on Monday represented the next tranche, and did not mean that more loans would not be sold in the second half of this year.

Analysts had warned the bank that they could find it hard selling the assets after the recent credit market chaos, which had hit the bank’s shares with concerns over higher funding costs.
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