The Bundesbank, Germany’s central bank, plans to shed roughly €2 billion ($2.6 billion) of distressed property loans tied to the Lehman Brothers' debacle, according to a Financial Times report today.
The report said that the German central bank has agreed to sell half of the €1.8 billion Excalibur portfolio to the U.S. private equity firm Lone Star. Details on what Lone Star will pay for the loans have not been disclosed.
In December, Lone Star bought Lloyds Banking Group's Project Royal portfolio of debt, worth more than ₤900 million ($1.4 billion), at a discount of up to 40% less than its value, according to several market reports. The Financial Times report indicated that this sale can provide a guide for pricing the Lehman loans.
The Excalibur portfolio includes legacy loans Lehman built up during the property boom. Lehman securitized the debt in the Excalibur portfolio in 2008 to use as collateral for raising liquidity from the European Central Bank.