Lone Star, the private equity firm, and Wells Fargo are in talks to purchase a GBP4 billion or US$6.09 billion property loans portfolio located in the UK. The portfolio is being put up for sale by Commerzbank.
According to an anonymous source, the deal can be finalized as early as May 2013. All three entities declined to make any comment on the transaction.
The second largest lending institution in Germany is selling off its UK property loans business from its mortgage subsidiary Hypothekenbank Frankfurt International. The firm was formerly named Eurohypo and the sale is a way to cut down the balance sheet size of the bank.
The two institutions would divvy up the sale asset, with Wells Fargo and Co acquiring the property loans business while Lone Star Fund would be purchasing the distressed debt and equity investor as well as the non-performing debt.
The sale is also in compliance by Commerzbank with state bailout conditions agreed upon after the 2009 financial crisis.
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