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p>One of the world’s largest banks is set to sell off almost £5 billion worth of UK property loans, in what would be the largest disposal of property debt by a European bank since the financial crisis.
Commerzbank, a German global banking and financial services company, is to sell £4.8 billion worth of UK loans from its mortgage unit, Hypothekenbank, formerly known as Eurohypo.
The German outfit, based in Frankfurt, is apparently looking to sell the portfolio to private equity investor Lone Star, and U.S based bank Wells Fargo.
If indeed the deal does manifest, it would see Hypothekenbank’s portfolio split between the two firms, with Lone Star controlling the distressed debt and Wells Fargo taking the performing loans.
The Financial Times reports other suspected buyers could include private equity groups; Blackstone, Apollo and Starwood Capital and Pimco.
The sale of the Hypothekenbank’s portfolio in the UK, which comes as UK banks Lloyds and RBS are disposing of many of their assets, will be managed by Barclays.
Commerzbank, formerly Europe’s largest commercial property lender, was once bailed out by the German government with around £15 billion of tax-payer funds, after the German outfit’s investment in Dresdner Bank, had caused significant damage to the Bank’s balance sheet.
The deal forms part of a wider movement across European banks– in particular those that are backed by governments – to sell off assets in an effort to free up capital and increase lending.
According to a report released by financial services giant, PwC, private equity firms and hedge funds the world over have been preparing large deposits in anticipation of a wave of non-core loans being sold by European banks under pressure to increase capital deposits.
One of the world's largest banks is set to sell off almost £5 billion worth of UK property loans, in what would be the largest disposal of property debt by a.
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