Barclays PLC and Blackstone Credit & Insurance announced that Barclays Bank Delaware (BBDE) has entered into an agreement with insurance accounts managed by Blackstone’s Asset Based Finance group to sell approximately US$1.1 billion of currently outstanding credit card receivables in relation to a defined set of Barclays-branded credit card accounts in the United States of America. This is the first in a series of activities Barclays plans to conduct to reduce its risk-weighted assets (RWAs) and create additional lending capacity for BBDE.
As part of the deal, BBDE will enter into a long-term strategic forward flow sale and servicing arrangement with Blackstone related to the Accounts. Blackstone’s investment will be made entirely on behalf of the firm’s insurance clients. The deal remains subject to certain conditions and is expected to fund in Q1 2024.
Under the terms of the deal, BBDE will retain legal title in respect of the Accounts and BBDE will continue to service the Accounts for a fee. And Barclays Bank PLC will invest into the deal alongside Blackstone’s insurance accounts.
The deal is expected to release approximately GBP£1.0 billion of RWAs on a post internal ratings-based (IRB) approach basis at the Barclays Group consolidated level. And BBDE plans to use the proceeds of the sale to fund its lending activities.
Barclays Bank PLC, acting through its Investment Bank, served as exclusive structuring advisor to Blackstone in the deal, to which it also served as risk retainer and liquidity facility provider.
KEY QUOTES:
“During our Investor Update, we said that we would leverage strategic partnerships to execute risk transfer agreements to reduce capital requirements. I am delighted to announce this first agreement in our US cards book.”
- Anna Cross, Group Finance Director at Barclays
“We’re pleased to partner with an industry leader like Blackstone on this transaction that will help fund lending activities and support the long-term growth ambitions for our US Consumer Bank. BBDE will continue to service the accounts, providing cardmembers with the high-level of service they have come to expect.”
- Denny Nealon, CEO of Barclays US Consumer Bank and BBDE
“This collaboration demonstrates how we are supporting leading financial institutions with large-scale, long-term, efficient capital solutions in the asset based finance markets. Barclays has a premiere franchise in structured products and consumer banking and we look forward to working with them in the coming years to grow the partnership.”
- Robert Horn, Global Head of Infrastructure & Asset Based Credit at Blackstone
