U.K. bank Barclays PLC (BCS) Wednesday announces the restructuring of $12.3 billion of credit market assets by a sale of the assets to Protium Finance LP.

MAIN FACTS:

-Protium is a newly established fund whose objective is to purchase credit market assets from third parties and manage those assets over time to benefit from their long term cash flows.

-The activities of Protium will initially be supported by $450 million of new funding provided by the partners of Protium and by a 10-year loan to Protium of $12.6 billion by Barclays.

-The loan will be used primarily to fund the purchase of the assets from Barclays.

-As part of the transaction any excess cashflows following repayment of the loan to Barclays will accrue to the partners of Protium.

-The assets will remain on balance sheet for regulatory purposes; consequently the transaction will not reduce the regulatory capital required for these assets and may lead to an increase.

-The assets will be sold at current fair values and therefore Barclays expects it will record neither a gain nor a loss on completion of the sale.

-Barclays will not consolidate Protium for accounting purposes and will derecognise the assets.

-Assets comprise structured credit assets insured by monolines ($8.2 billion), RMBS/Other ABS assets ($2.3 billion) and residential mortgage assets ($1.8 billion) held in Barclays Capital.

-Structured credit assets comprise assets with a fair value of $3.6 billion and monoline guarantees valued at $4.6 billion.

-The loan has a commercial rate of return fixed at U.S.D LIBOR plus 2.75% (expected to amount to a cumulative total of $3.9 billion)

-Loan is secured by a charge over the assets of Protium.

-By London Bureau, Dow Jones Newswires; Contact Ian Walker; +44 (0)20 7842 9296; ian.walker@dowjones.com