Just Group PLC said Monday that it has sold part of its portfolio of lifetime mortgages to Rothesay Life for £ 334 million ($ 463.1 million) and that it expects to sell the remaining tranche of loans in the coming weeks.
The price is met through a combination of cash and gilts, and the proceeds from the sale will be invested in other fixed-rate assets to support the insurance obligations of Just Group, a UK-based provider of retirement products and services.
The sale will result in a net loss of £ 76 million, which is part of a total expected loss of £ 125 million from the sale of the portfolio of lifelong mortgages disclosed in Just Group’s results last week, the company said. The Just Group said the deal reduces its exposure to UK residential property risk and is expected to raise Solvency II’s capital coverage ratio – a measure of capital strength – to 1 percentage point.
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