Capital One to Sell $17 Billion Worth of Mortgages to Credit Suisse
May 08 2018 - 10:31AM
Dow Jones News
By Austen Hufford
Capital One Financial Corp. (COF) is selling about $17 billion
worth of mortgages to a subsidiary of Credit Suisse AG as it works
to exit the mortgage business.
The move comes after Capital One said in November that it would
stop offering new home loans, citing the complex and competitive
nature of the business and the interest-rate environment. Interest
rates on typical mortgages have remained well below those seen in
the run-up to the financial crisis.
Capital One said it was selling about $17 billion of first and
second lien mortgages to DLJ Mortgage Capital Inc., a subsidiary of
Credit Suisse. Capital One expects to complete the transaction and
record a gain in the second quarter of 2018.
"Strong market demand enabled us to negotiate and sign this
complex transaction more quickly than we thought possible," Capital
One financial chief R. Scott Blackley said.
As a result of the sale, Capital One will resume repurchasing
shares of its common stock through the end of its second
quarter.
Shares of Capital One rose 2.3% in morning trading in New York.
Credit Suisse shares are down 0.1% in Zurich trading.
Write to Austen Hufford at Austen.Hufford@wsj.com
(END) Dow Jones Newswires
May 08, 2018 10:16 ET (14:16 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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