Almost a decade after their nationalisation, a £5.5 billion portfolio of pre-crisis mortgages is the subject of a bidding war between some of the world’s leading debt managers.

UK Asset Resolution, the body formed to manage the then-unsellable toxic assets of Northern Rock and Bradford & Bingley, is understood to have shortlisted Pimco, M&G and the hedge funds Och-Ziff and Cerberus Capital Management, according to a Sky report.

The transaction follows an £11.8 billion sale of UKAR assets to Blackstone and Prudential last year. UKAR declined a Sky request for comment.

The money raised will be used to pay down the remaining £4.7 billion due from a £20.4 billion loan issued by the Treasury to the Financial Services Compensation Scheme in 2009 to buy bank assets.     

Sale of the assets had been delayed by the inclusion of pre-crash self-certified loans considered some of the most toxic of the era, which were subject to regulatory controls.

The repayment resolves one of the remaining crisis-era liabilities on the public books.

Chancellor Phillip Hammond announced in last year’s budget his intention to resume sales of shares in RBS, once the bank reaches settlement of its remaining liabilities related to mortgage-backed securities.