Royal Bank of Scotland is poised to sell a 1.36 billion pound ($2.1 billion) property loan portfolio to a fund managed by Blackstone as it battles to retreat from riskier real estate lending, a person familiar with the deal told Reuters.
The deal follows a tortuous sale process that faltered in September as global financial turmoil caused outside debt funders to pull out of talks and means RBS retains greater exposure to the loans for longer than it hoped.
The loans will be put into a jointly owned vehicle in which the state-owned bank will hold a 75 percent equity stake that it will sell down by the end of 2013, the person said. US private equity giant Blackstone, backed by China Investment Corporation, will take a 25 percent equity share and manage the properties.
The underlying assets, which number 29, were deemed riskier to the bank because they were outside so-called prime locations and have higher loan-to-value ratios, a calculation that measures debt held over a property against its value.
The vehicle bought the loans at a discount of about 30 percent and both sides stand to benefit once they are securitised or sold.