LONDON (Reuters) - Lloyds has signed contracts choosing Grainger as the preferred supplier to the Residential Asset Management Portfolio (RAMP), a vehicle to restore the value of its troubled housing assets.
Grainger would manage the housing assets placed in RAMP, after the commencement of an insolvency process, said Grainger in a statement on Wednesday, adding the deal with part-nationalised Lloyds was the first of its kind in the UK.
“The transaction will deliver to Grainger a recurring income stream with the potential for further upside without the need to commit any group equity or debt,” said Grainger’s executive property director, Nick Jopling.
Grainger would receive fees based on rent, disposals and shared success fees, thereby aligning its interests with those of any administrator or receiver of any assets placed into RAMP.
Grainger said it managed a portfolio in the UK comprising about 20,000 residential assets and therefore had the operational platform in place to provide strategic and asset management services nationwide.
The government has stakes of about 41 percent in Lloyds and 83 percent in rival Royal Bank of Scotland after it had to bail out both banks with taxpayers’ money during the credit crisis.
As a result of the state bailout, European regulators ordered Lloyds and RBS to sell off a host of assets.
Reporting by Andrew Macdonald; Editing by Karen Foster