ROYAL Bank of Scotland yesterday announced it has sold around 10 per cent of its leveraged loan book as it continues its asset sale in the wake of its government bailout.
The group announced it has sold a portfolio of loans worth €1.4bn (£1.15bn) to Intermediate Capital Group (ICG). The bank did not release the value of the transaction but analysts estimate a loan value to be around 90p in the pound, making the sale worth approximately €1.27bn.
The loans are predominantly European mid-market leveraged financial loans across a diversified range of sectors. The bank said more than half of the portfolio is triple-A rated and a large portion is double-A rated.
ICG, which has €11bn under management, says it will fund the acquisition with a combination of equity and debt.
Nitin Arora of Execution Noble said the deal looks like good news for ICG shareholders and should lead to decent capital gains.
An RBS spokesman told City A.M.: “This is further evidence of our recovery story. It is part of our strategic plan to reduce our leverage, which will no longer be part of our core business moving forward.
“This sale has reopened a section of the market that has been dormant since the financial crisis and the market will no doubt be following it closely.”
The sale takes place against a backdrop of asset sales at RBS, which is 84 per cent owned by the government. Earlier this month it agreed a sale of its credit-card payment processing unit to private equity firms Advent International and Bain Capital for £1.7bn. It also sold 318 of its branches to Santander.