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Exclusive: Goldman & TPG Eye Lloyds Loans

(c) Sky News 2012

Goldman Sachs (NYSE: GS - news) , the Wall Street bank, is in talks to buy a cut-price portfolio of Lloyds Banking Group (LSE: LLOY.L - news) loans made to some of Britain's best-known companies.

I have learned that an investment arm of Goldman has teamed up with TPG, the buyout firm, to bid for Project Lundy, a collection of about 40 loans to housebuilders and other companies.

Goldman and TPG have been granted a period of exclusivity to finalise a deal with Lloyds, which may secure a price of little more than half the face value of the loans.

The debt positions include borrowings made by companies including Menzies, the hotel chain, and packaging group Linpac.

The auction, which is being handled by investment bankers at Barclays (LSE: BARC.L - news) , has been running for three months.

Most of the Lundy loans are the legacy of Lloyds' rescue of HBOS during the 2008 banking crisis. Lloyds' recent half-year results illustrated the degree to which it continues to wrestle with the huge numbers of bad loans made by its former rival.

The state-backed bank has sold a number of other loan portfolios since it was rescued by taxpayers, including a parcel of debt in Australia and some UK commercial property loans.

Other bidders for the Lundy portfolio are reported to have included Bank of America Merrill Lynch, Lone Star and Vision Capital.

Lloyds, Goldman and TPG declined to comment.

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