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Lone Star in talks to buy UK property loans from Commerzbank

18 Apr 2013

dallas texas city_sqDallas-based buyout firm Lone Star and bank Wells Fargo are reportedly in talks to acquire a UK property loans portfolio worth £4bn from Commerzbank.

The sides could reach a deal as soon as next month according to Reuters, which cited a person familiar with the deal.

Approaches from private equity majors Blackstone, Apollo and Starwood Capital have been rejected by Commerzbank according to a separate report by the Financial Times.

The source said that Lone Star, which is focused on distressed assets, is interested in buying non-performing debt, while Wells Fargo is looking to buy the performing loans.

Commerzbank has put the UK property loans business of its mortgage unit Hypothekenbank Frankfurt International to reduce the size of its balance sheet and comply with the BASEL III rules.

The report noted that Commerzbank said in a presentation in February that its UK commercial real estate portfolio was the largest among those classified as higher risk with an exposure at default of $6.8bn.

Last month AltAssets reported that Lone Star held a $1bn first close of its eighth distressed investment fund only a few months after launching it.

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