Lehman UK sub-prime book about to go in knock-down sale

Lehman UK sub-prime book about to go in knock-down sale
The administrators to Lehman Brothers in the UK are close to selling a £900m portfolio of sub-prime mortgages, for a price of about 50p in the pound.

By Katherine Griffiths, Financial Services Editor Last Updated: 9:14PM GMT 21 Dec 2008
Lehman was one of the largest players in the high-risk end of the mortgage market in the UK.
PricewaterhouseCoopers, which is handling the administration of Lehman in London, set up an auction for one bundle of sub-prime loans as well as other assets including its Capstone servicing business, which employs 450 people.
Second round bids for the portfolio must be tabled before the end of January. Several private equity groups and vulture funds are understood to be interested, including America's Apollo and Blackstone.
The auction of mortgage assets is one of the largest in recent months. The outcome will have ramifications for the banking sector because, if the price is very low, it could put pressure on other lenders to take further mark downs on the value of their mortgage assets.
The British mortgages have been bundled together with Irish and Portuguese loans by PwC. A second tranche of mortgages originated in Latin America and eastern Europe and worth €2.5bn (£2.3bn) will be put up for auction in the new year.
The PwC partners leading the administration, Tony Lomas, Dan Schwarzmann, Steven Pearson and Mike Jervis, have predicted winding up Lehman will be "more complex" than Enron.
Some hedge funds and other parties have expressed frustration because their money is frozen in Lehman accounts.

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/3885723/Lehman-UK-sub-prime-book-about-to-go-in-knock-down-sale.html