Barclays to sell $1.1b worth US credit card debt to Blackstone

By Gloria Methri

Barclays has agreed to sell approximately $1.1 billion worth of credit card debt in the US to private equity firm Blackstone, to expand its lending capacity and reduce balance sheet risk.

Barclays Bank Delaware (BBDE) has signed the agreement with insurance accounts managed by Blackstone’s asset-based finance group, to sell the credit card debt. As part of the transaction, BBDE will enter a long-term strategic sale and servicing arrangement with Blackstone, retain the legal title for the credit card accounts and continue to service them for a fee.

Blackstone’s investment will be made entirely on behalf of the firm’s insurance clients. Barclays will also fund the transaction alongside Blackstone’s insurance accounts. The transaction, subject to certain conditions, is expected to be funded in Q1 2024.

The transaction is expected to release approximately GBP£1.0 billion of RWAs on a post-internal ratings-based approach. BBDE intends to use the proceeds of the sale to fund its lending activities.

Anna Cross, Group Finance Director at Barclays, said, “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.”

“We are 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,” said Denny Nealon, CEO of Barclays US Consumer Bank and BBDE. “BBDE will continue to service the accounts, providing cardmembers with the high level of service they have come to expect.”

Robert Horn, Global Head of Infrastructure & Asset Based Credit at Blackstone, said, “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.”