Lloyds Banking Group’s long-awaited second UK loan book sale is to be launched imminently.
The bank has appointed JP Morgan Cazenove to sell the portfolio and is to start approaching investors, expected to include private equity giants such as Lone Star, Blackstone and Colony Capital.
The portfolio is officially known as Project Royal II, following the bank’s first UK portfolio sale, which was offloaded to US private equity firm Lone Star last year.
It is expected to be smaller than the bank’s Projects Royal I sale, which had a face value of around £930m.
The marketing process is still at an early stage and it has not yet been decided which loans will be part of the portfolio, although the final pool is expected to range in size from £600m to £800m.
The first Royal portfolio featured more than 250 separate loans to around 35 borrowers. Lone Star bought the package at a discount of around 40% of face value.
Lloyds is also in the process of offloading an Irish loan portfolio as part of its efforts to unwind the legacy of a huge property lending spree undertaken during the credit boom by HBOS, which Lloyds bought in February 2009.
US firms Cerberus Capital Management and Kennedy Wilson are understood to have gone through to the second round of bidding for a €400m portfolio of Irish loans that is being sold by the lender’s Bank of Scotland (Ireland) division.
Lloyds declined to comment.
