Cerberus Capital Management, L.P. plans to buy a £ 13 billion ($19.93 billion) loan portfolio originally owned by Northern Rock and Bradford & Bingley, two U.K. banks that went bust in the financial crisis and were taken over by the British state.

The U.S. private-equity firm said on Friday that it has agreed to acquire mortgage and loan assets from U.K. Asset Resolution Ltd. and NRAM PLC, including £ 12 billion of loans in the loan-securitization entity known as Granite and other legacy mortgages of NRAM, the former Northern Rock mortgage business. U.K. Asset Resolution is the holding company for the government's stake in Bradford & Bingley and NRAM.

"This portfolio is an important addition for Cerberus and further demonstrates our commitment to our European mortgage and real-estate investment strategy," said Cerberus Chairman John Snow in a statement.

Northern Rock was the first English lender to suffer a bank run in 150 years when it collapsed in the credit squeeze in 2007, followed by Bradford & Bingley, with both lenders undone by their reliance on money-market funding.

The British government said back in March it would sell £ 13 billion in assets held from the forced nationalization of Northern Rock and Bradford & Bingley.

Credit Suisse was appointed in November last year to conduct a review of options to accelerate repayment of the government loans, while ensuring the stability and continuity of service to customers.

Morgan Stanley advised Cerberus in the acquisition of the U.K. assets.

Write to Ian Walker at ian.walker@wsj.com

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(END) Dow Jones Newswires

November 13, 2015 03:35 ET (08:35 GMT)

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