Bank of America is selling Premium Credit Ltd to a private equity investor, Insurance Times has learnt.
The US banking giant is offloading the company - one of the two dominant players in the UK premium finance market - as part of a wider sale of its British and Irish MBNA credit card business.
A source close to the deal said that the wider transaction will see Premium Credit, which provided premium finance services to half of the UK’s 50 top brokers according to its latest published accounts in 2009, end up in the hands of a private equity house.
Premium Credit’s pricetag is an estimated £800m, according to the source, of which approximately £150m is equity and the rest debt.
Premium Credit’s holding company Vendcrown Ltd is a wholly owned subsidiary of MBNA Europe.
MBNA bought the Epsom-based company in 2004 before it was in turn swallowed up by Bank of America in the following year.
The sale of MBNA and its Premium Credit subsidiary is driven by Bank of America’s goal to build up its balance sheet strength by disposing of non-US and non-investment banking core assets.
A Bank of America spokesman said: “It does not have a natural fit within Bank of America Merril Lynch.”
Bank of America originally put Premium Credit up for sale in 2006.
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