June 26 (Bloomberg) -- Barclays Capital stayed out of a group that sold loans used in the leveraged buyout of television producer Endemol NV, refusing to take a loss on assets that contributed to $400 billion of writedowns for the world's banks.

Goldman Sachs Group Inc. and four other lenders sold 1.1 billion euros ($1.7 billion) of the high-yield debt this week for as little as 70 cents on the dollar, said three people with knowledge of the deal, who declined to be identified because the sale is private. London-based Barclays, the U.K.'s third-largest bank, has avoided writing down loans to companies that it says are ``performing well.''

The loans to the producer of the ``Big Brother'' TV series were arranged before credit markets seized up in July, causing investors to shun all but the safest government debt. The average price of actively traded loans has fallen to about 90.49 cents on the dollar from about 100 cents a year ago, according to Standard & Poor's LCD.

The suggestion that Barclays should have written down more credit assets, including its loan holdings, ``is surprising to us,'' President Robert Diamond said yesterday on a conference call with reporters after the firm announced it would raise 4.5 billion pounds ($8.9 billion) to boost capital and lending.

Barclays spokesman Will Bowen and Goldman spokeswoman Rebecca Nelson, both in London, declined to comment on the Endemol loans.

TV Ratings

Goldman led banks that lent 2.2 billion euros last year to finance the 2.6 billion-euro buyout of Endemol by Dutch billionaire John De Mol, Italian Prime Minister Silvio Berlusconi's Milan-based Mediaset SpA and New York-based Goldman's private-equity unit. The other loan arrangers included Credit Suisse Group, Royal Bank of Scotland Group Plc, Lehman Brothers Holdings Inc. and Merrill Lynch & Co.

The Hilversum, Netherlands-based company's flagship show films strangers living together in a house isolated from the outside world. The ninth series of ``Big Brother'' in the U.K. began this month with 5.2 million viewers watching the opening episode, a 26 percent decline from 2006, according to figures published in the U.K.'s Guardian newspaper.

Buyout firms borrow about two-thirds of the money needed for acquisitions and underwriters earn fees for arranging the financing. Leveraged loans are rated below BBB- by S&P and less than Baa3 by Moody's Investors Service.

Two Prices

Goldman and other lenders have sold LBO debt for as little as 63 cents on the dollar, helping to reduce an overhang of unsold loans to $77 billion from $237 billion, according to data compiled by Bank of America Corp. in Charlotte, North Carolina.

Goldman, which coordinated the sale of Endemol's loans, increased the discount after investors rejected a price of 72.5 cents, the people said. The banks agreed to provide financing for some investors who bought at a higher price of 75 cents, the people said.

The Chief Operating Officer of Barclays' investment banking unit, Richard Ricci, said in an interview last month that the bank wouldn't sell at a loss ``loans that are performing and where the company is performing well and where the value is not being recognized.''

Barclays decided against selling loans used for buyout firm Kohlberg, Kravis Roberts & Co.'s purchase of Nottingham, England-based pharmacy chain Alliance Boots Plc. The other underwriters of that loan, led by Deutsche Bank AG, sold the debt for 91 cents on the dollar last month.

Barclays disclosed 190 million pounds of impairment or bad- loan charges on about 7.3 billion pounds of leveraged loans in the first-quarter, Barclays spokesman Simon Eaton said.

``Bob Diamond has made a robust defense,'' said Alex Potter, a London-based analyst at Collins Stewart, who has a ``sell'' recommendation on Barclays stock. ``The trouble is you don't how many positions they have like that, and what the quality of the loans are like across the board.''

To contact the reporters on this story: Cecile Gutscher in London at cgutscher@bloomberg.net

Last Updated: June 26, 2008 10:04 EDT