Lloyds Banking Group has sold a £778.6 million debt portfolio backing properties in Scotland and the north of England for just £390m – a 50 per cent discount.
American property investment fund Kennedy Wilson has paired up with Deutsche Bank to acquire Project Forth, a 41-strong defaulted loan pool secured by around 100 properties. The bad loans, part of the bank’s legacy of lending by the failed HBOS, are lent to 11 separate borrowers.
The deal is the third such UK property loan portfolio sold by Lloyds in the past year. Venture capitalist Lone Star acquired the £923m Project Royal portfolio, while Oaktree Capital Management acquired the £625m Project Harrogate portfolio. All told, the bank has sold six such bundles of bad loans in 2012 in an effort to improve its balance sheet.
Lloyds declined to comment.