Goldman Sachs (GS) is in talks to purchase UK subprime mortgage-lender Kensington from the South African investment bank Investec, The Times of London reported on its website. The newspaper said the talks were in the early stages, but could intensify in early 2008. Investec purchased Kensington in May of this year for $575 million to gain exposure to the UK subprime business. The timing of the move could not have been much worse, as the markets were subsequently hit by a global credit crunch, and Investec was forced to cut overhead and tighten its lending standards
in order to stay in business. Investec issued a statement Monday denying any talks were taking place. The Times said Goldman is "eyeing a number of sub-prime lenders in the U.S." and UK.
Also Monday, Goldman completed its acquisition of residential mortgage asset investor Litton Loan Servicing from C-Bass; terms were not disclosed, although when the deal was announced last month, a C-Bass owner said the Litton unit was being sold for about $468 million. In September, Goldman CFO David Viniar said the firm was hunting for "distressed assets." Goldman shares closed up 2.9%.
Additional Reading: An Analysis of Ben Stein's Beef with Goldman Sachs • Goldman Sachs F3Q07 (Qtr End 8/31/07) Earnings Call Transcript
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