Northern Rock mortgages worth £13bn sold to US private equity firm

UK Asset Resolution deal with Cerberus Capital Management is the largest financial asset sale by a European government

The government has agreed to sell a 13bn collection of former Northern Rock mortgages to a US private equity group.

UK Asset Resolution (Ukar), the zombie bank created to run down the loans in Northern Rock and Bradford and Bingley, said it would sell the loan operation known as Granite as well as a further 1bn of Northern Rock loans to Cerberus Capital Management, which specialises in buying distressed debt. The deal is the biggest sale of financial assets by a European government, the Treasury said.

Related: Northern Rock mortgages are latest gamble for US private equity firm Cerberus

Related: If the Northern Rock fiasco was a morality tale, it was more about hubris than greed | Giles Fraser