Asset sales: European banks delay day of reckoning

It must have been with some relief that UK bank Lloyds finally offloaded a Pounds 1.2 billion ($1.9 billion) portfolio of UK corporate loans at the end of the summer. The pool consisted of between 40 and 50 legacy loans the bank acquired as part of its ill-starred merger with HBOS. The process, dubbed Project Lundy, saw several potential buyers walk away, and the final price at which the assets were sold to Goldman Sachs and private equity firm TPG reportedly ended up at around 50p in the pound. The UK bank sold another portfolio of UK leveraged loans with a face value of Pounds 500 million to another private equity buyer, Bain Capital's credit investment arm Sankaty Advisors, earlier this year. That deal was also priced to sell. The two quasi-nationalized UK banks, RBS and Lloyds, both of which have declared targets for balance-sheet reduction, have dominated corporate loan portfolio sales in Europe so far this year.