Lloyds Banking Group Plc, Britain’s second-biggest government-aided bank, sold more than 900 million pounds ($1.41 billion) of mortgage-backed loans to Lone Star Funds.
Royal Bank of Canada and Citigroup Inc. provided funding for Lone Star to buy the portfolio, the Dallas-based buyout firm said in an e-mailed statement today.
It’s the second sale this week of commercial real estate loans by a taxpayer-assisted British bank to a U.S. private-equity firm. Royal Bank of Scotland Group Plc finalized a sale of 1.36 billion pounds of real-estate loans to a fund managed by Blackstone Group LP, three people with knowledge of the talks said yesterday.
“We are confident of the ability of the Lone Star Funds to deliver constructive solutions to banks and, as further de-leveraging takes place in the property sector, the Lone Star Funds are well-placed,” Angus Dodd, managing director of U.K. real estate, at Lone Star Management Europe Ltd., said in the statement.
The private-equity firm may buy the loans at a 40 percent discount, two people familiar with the process said on Dec. 7. Colony Capital LLC also submitted a bid for the loans, one of the people said.
A Lone Star spokesman today declined to comment on the loans-purchase price. Lloyds is 41 percent taxpayer owned.