Just Group sells portfolio of lifetime mortgages to Rothesay for £334m

Just Group has sold a portfolio of lifetime mortgages to Rothesay Life for £334m.

The retirement specialist announced with its interim results last week that it was in the process of selling a portfolio of LTMs with a loan value of more than £475m and an IFRS value as at 30 June 2021 of £493m.

It said on Monday that the sale of the remaining tranche of loans is likely to occur over the coming weeks.

The LTM assets being sold form part of the investments used to back the company's insurance liabilities and Just Group said proceeds from the first transaction will be invested in a mixture of other fixed interest assets to back its insurance liabilities.

The sale will result in an IFRS net of tax loss of £76m, which includes the insurance liabilities impact due to the lower investment yield on the replacement bonds.

Just Group said: "This transaction enables the group to further reduce its exposure to UK residential property risk.

"As announced at the interim results, the sale of this portfolio of LTMs, including the remaining tranche, is expected to result in an improvement in the group's Solvency II capital coverage ratio by up to one percentage point and also reduce the sensitivity of that ratio to movements in UK residential property prices by over one percentage point."