The government will receive £154.5 million cash for the notes, which were issued to HM Treasury in January 2012 at a par value of £150 million as part of the sale of Northern Rock plc.
After a competitive process among a number of potential purchasers, Virgin Money was selected by UK Financial Investments (UKFI) as the winning bidder.
The sale has secured further value for the taxpayer and will be used to pay down the national debt. It is part of the government’s long term economic plan to build a stronger and safer banking sector.
The government received advice from UKFI that it would be appropriate to sell these notes. The government agreed with that advice and authorised the process to begin.
The Economic Secretary to the Treasury, Andrea Leadsom, said:
I can confirm today that we have sold our holding of Tier 1 notes, issued by Virgin Money for £154.5 million. This represents good value for the taxpayer and the money will be used to reduce the national debt.
This is another step in the government’s long term economic plan to deliver a more secure and resilient economy. It is another step in repairing the banks, in reducing our national debt and in getting the taxpayer’s money back.
Tier 1 notes are capital instruments and were used by Virgin Money, along with cash payments, to pay for Northern Rock plc.