LLOYDS has continued to cut its vast loan book by agreeing to sell a portfolio of loans to the US private equity firm formerly run by presidential candidate Mitt Romney.
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.