The consortium comprises opportunistic funds managed by Blackstone, TPG Special Situations Partners (TSSP), and CarVal Investors.
The sale is in line with GE’s strategy to offload most GE Capital assets in order to focus on its high-value industrial businesses.
GE Capital said that the deal represents the sale of almost all its remaining UK mortgage business, reducing its size to about $400m, from $13bn at the beginning of the year.
Commenting on the sale, GE Capital chairman and CEO Keith Sherin said: "This transaction represents the sale of almost all our remaining UK mortgage business, which successfully provided financing for UK home owners.
"We began this year with around US$13bn of ending net investment (ENI) and when this transaction closes, we will have approximately US$0.4bn of ENI remaining in our UK mortgage business.
"This is an important step as we continue to execute on our plan to sell most of the assets of GE Capital."
The deal to sell UK home loan portfolio will contribute close to $400m of capital to the company’s overall target to pay about $35bn of dividends to GE shareholders.
In total, the combined sales of the UK home lending portfolios, including this transaction, will contribute nearly $1bn of capital to the target.
GE said that it will retain the financing verticals related to its industrial businesses.
Earlier this year, GE agreed to sell GE Capital’s $30bn worth commercial lending and leasing businesses to Wells Fargo for an undisclosed amount.
The sale also includes GE Capital corporate finance unit’s portfolio of senior secured loans and leases for middle market companies across the US and Canada, as well as some employees.
Image: GE Capital is the financial services unit of the American conglomerate General Electric. Photo: courtesy of joho345 / Wikimedia Commons.
