Government kicks off next stage of £12bn student loanbook sell-off
The government formally kicked off the next stage of its bid to sell £12bn-worth of student loans today.
CityAM revealed bankers from Barclays had been appointed to advise on the deal last month.
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The sale, which is being structured as a securitisation, is being led by UK Government Investments Limited for the government, which confirmed Barclays is acting as sole arranger for the sale today.
The Department for Education has mandated Barclays, Credit Suisse, Lloyds and JP Morgan to act as joint lead managers and joint bookrunners for the sale, while Rothschild has been named as an independent adviser to the government.
The sale is expected to be the first in a series of sales of pre-2012 English student loans, which is targeting £12bn of proceeds by the end of the 2020/21 financial year.
The government said it had structured the loans into five tranches “of varying seniority and maturity from senior, investment grade rated tranches to an unrated tranche”. The department is expecting interest from pension funds, insurers and asset managers.
The current sale process is expected to take several months to conclude and “remains subject to market conditions”.
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“The autumn statement reaffirmed our commitment to the sale of the student loan book if market conditions were favourable and I’m pleased the timing is now right to start the process,” said chief secretary to the Treasury David Gauke.
“This sale makes sense for taxpayers and will play an important contribution in our work to repair the public finances.”
Universities minister Jo Johnson said:
This government is committed to bringing public finances under control, and returning the budget to balance. As part of this we will look to sell assets where value for money to the UK taxpayer is assured.
This sale will have no impact on people with student loans and will only proceed once we are satisfied that it represents value for money for the taxpayer.