Northern Rock expects to raise £2.25b through the sale of its portfolio of Lifetime home equity release mortgages to JPMorgan Chase at a premium to its balance sheet value.

The move is likely to be seen as an encouraging sign that buyers are beginning to emerge for mortgage assets owned by the stricken bank that are regarded as good quality.
However it may raise concerns that Northern Rock is selling off the better quality assets, leaving the government and shareholders with less attractive portfolios.
A spokesman for Northern Rock said: ""It's not a question of degrees of quality. This was an opportunity to sell a relatively small percentage of our assets.""
In another twist in the Northern Rock saga, trustees of the pension scheme have asked the company to place members on the same footing as depositors by setting aside enough mortgage assets to guarantee that all promised benefits could be fully paid if the bank becomes insolvent.
The move, detailed in a letter to scheme members sent on Friday, puts yet more pressure on a government that has already extended more than £25b in loans to keep Northern Rock solvent.
But the bank would be unable to meet the trustees' request to pledge assets as security without the permission of its regulator and the guarantors of its loans -- the Financial Services Authority, Bank of England, and the Treasury.
In the letter, David Chapman, chairman of the Trustees, notes that if Northern Rock were to become insolvent immediately ""significant additional funds would need to be paid into the scheme"" of around £150m to £200m.
Last October, as the lender's woes mounted, Trustees moved to shift the scheme's assets into much less risky areas. Nearly half is currently invested in index-linked government gilts.
But Friday's sale of the mortgage portfolio may raise hopes at the Treasury, the FSA, and the Bank that a private sale may still be possible.
However, among leading shareholders concerns that the bank is selling the lender's most desirable assets may rise.
The sale value of £2.2b represents a premium of 2.25 percent or about £50m over the balance sheet value, bringing the total cash proceeds from the agreed sale to £2.25b.
Andy Kuipers, new chief executive, welcomed the sale.
""This ... is a positive development in the company's ongoing strategic review,"" he said in a statement.
""It illustrates the quality of our assets, which has enabled us to achieve a sale at a premium despite continuing difficult financial markets, and will allow the company to reduce its debt to the Bank of England.""
The divestment of the Lifetime portfolio has come as the Northern Rock sale appeared to have reached an impasse over the issue of financing. The two bidders for Northern Rock -- Olivant and the consortium led by Richard Branson's Virgin Group -- are struggling to find backing from commercial banks for a takeover and repay part of the £25b.
The sale comes just days before shareholders are due to meet for an extraordinary general meeting in Newcastle.
Northern Rock's two largest shareholders to vote against a board proposal that would allow the bank to issue new shares, buy or sell assets, or making changes to the structure of the bank without explicit approval from shareholders.
SRM Global and RAB Capital, the hedge funds that between them own 18 percent of Northern Rock's shares have demanded an EGM and urged other shareholders to vote against the board's proposals.
The EGM is likely to provide thousands of small shareholders with an opportunity to vent their frustration at the bank's near-collapse. Northern Rock's shares, which have collapsed since it became clear the Bank had prevented the lender's collapse, rose 5.6 percent or 4.75p to 90p.