Royal Bank of Scotland Group Plc, Britain’s biggest government-owned bank, sold 1.36 billion pounds ($2.1 billion) of real-estate loans to a Blackstone Group LP-managed fund, three people with knowledge of the talks said.
RBS will provide 550 million pounds in debt to help Blackstone buy the assets, said the people, who declined to be identified because the talks aren’t public. The private-equity firm, which together with RBS is creating a company to hold the loans, is buying the investments for about 29 percent less than face value, two of the people said.
Blackstone, the world’s largest buyout firm, will manage the real-estate loans and will buy a 25 percent stake. Edinburgh-based RBS plans to sell its 75 percent stake in the joint venture with Blackstone by 2013, one of the people said.
RBS Chief Executive Officer Stephen Hester, 51, has shrunk the lender’s assets by 40 percent to 1.45 trillion pounds since the 2008 financial crisis, when it received the world’s biggest bailout and ceded an 83 percent stake to the U.K. government.
Officials at RBS and Blackstone declined to comment. The talks were reported earlier by the CoStar Finance Blog. RBS named Blackstone as the buyer for the portfolio of commercial real estate loans in July. The sale was codenamed “Project Isobel” by the lender.
Today’s transaction follows Credit Suisse Group AG’s agreement to finance the sale of $2.8 billion of property loans to Apollo Global Management LLC in December, two people with knowledge of the matter said.