LONDON, May 31 (Reuters) – Lloyds Banking Group is looking to sell an estimated $500 million tranche of its shipping loans as it continues to shrink its non-core portfolio, trade finance sources said on Friday.
The bank declined to comment. It had about 7 billion pounds ($10.7 billion) of shipping loans outstanding at the end of March.
“Lloyds has been trying to sell off another portion of their loan book and they have been trying to do it below the parapet using specialists,” one trade finance source said. “They are taking a piecemeal approach to selling their overall loan book.”
In October sources told Reuters Lloyds took a near 50 percent loss on a $750 million portfolio of shipping loans it sold to U.S. private equity firm Oaktree Capital.
“The cleanest solution would have been for Lloyds to have sold (the whole portfolio) at 90 or 95 cents on the dollar and shut it down but nobody was offering them anything close to that,” said Basil Karatzas, chief executive of consultancy and brokerage Karatzas Marine Advisors & Co. “Now they appear to be parcelling out the portfolio.”
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