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Shepherd and Wedderburn advises on GBP13 billion UK government sale of Northern Rock asset portfolio

The specialist securitisation team of leading Scottish law firm, Shepherd and Wedderburn, has acted alongside Allen & Overy in advising the debt funders Cerberus Capital Management’s acquisition ofNorthern Rock’s GBP13 billion asset portfolio – the largest ever financial asset sale by a European government. 

Shepherd and Wedderburn advised the arrangers of the financing on the transaction, leading on Scots law structuring and advice.
Following a competitive bidding process, the asset portfolio, which includes mortgages acquired by the UK government during the financial crisis, is being sold by UK Asset Resolution Limited to Cerberus and its affiliates. Cerberus is purchasing approximately GBP13 billion worth of assets which includes GBP12 billion loans currently within the ‘Granite’ securitisation and a further GBP1 billion of other loans. The sale comprises performing and non-performing residential mortgages as well as linked unsecured loans from the legacy mortgage book of NRAM, the former Norther Rock plc residential mortgage business.
The five-strong Shepherd and Wedderburn team, led by partner Hamish Patrick and solicitor Neil Campbell, advised the lenders on all Scots law matters relating to the financing and purchase of the portfolio. A separate team led by Finance and Restructuring  partner, Rod Macleod also advised an affiliate of Cerberus on the transaction. 
Patrick says: “This was a significant and complex transaction which, from a Scottish perspective, involved putting in place structures that would allow the purchase to happen. The transaction demonstrates the growing market confidence in assets such as residential mortgage portfolios. It was great to be involved in a transaction which returns value to the UK government and taxpayer.” 

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