Blackstone buys $1.1bn of US credit card debt from Barclays
British bank Barclays is selling approximately $1.1 billion worth of its US credit card debt to asset management giant Blackstone.
Barclays sells portion of US credit card debt to Blackstone
The deal will see the bank transfer the debt from its branded credit card programme in the US to Blackstone’s credit and insurance segments, which were consolidated last September.
Barclays says the transaction is part of a move to release around £1 billion in risk-weighted assets (RWAs), and that it will use the proceeds of the sale to fund an extension of the lending activities it operates through its US consumer bank.
The deal marks an active use of the bank’s strategic partnerships to “execute risk transfer agreements to reduce capital requirements”, according to Anna Cross, group finance director at Barclays.
The agreement remains subject to certain closing conditions and is set to complete this quarter. Barclays adds it will continue to service the accounts for a fee and will “retain legal title in respect of the accounts”.
For Robert Horn, global head of infrastructure and asset-based credit at Blackstone, the deal demonstrates how the firm is supporting financial institutions “with large-scale, long-term, efficient capital solutions in the asset based finance markets”.
The announcement follows a flurry of market activity involving the two parties, including Blackstone’s acquisition of a majority stake in Sony Payment Services at the beginning of the year and Barclays’ £600 million takeover of Tesco Bank last month, which promoted a specific focus on lending.
