The British bank, 41 per cent taxpayer owned, is offloading the leveraged loans to Sankaty Advisors, the credit investment arm of Bain Capital.
The portfolio of UK loans has a face value of about £500m but was sold at a “significant” discount, insiders said. It is made up of about 26 leveraged loans, most of which are believed to be performing well and were made to private equity-backed firms.
The deal is part of a much bigger project in which Lloyds sells off non-core assets in order to boost its balance sheet. It has been chipping away at its £141bn book of non-core loans, which includes property loans, general corporate loans and specialist finance loans and it also wants to sell its $10bn portfolio of shipping loans.
Sankaty, which has a base in London, accounts for about a quarter of Bain’s $60bn of assets under management. Lloyds and Sankaty declined to comment.
Last week Bain, co-founded by Romney, moved to defend its record of investments after months of being criticised as a “corporate raider” as its former boss seeks the Republican nomination for US President.