Deutsche Bank AG has succeeded in unloading roughly $5 billion in leveraged loans at around 90 cents on the dollar, according to a
Reuters report. The news service attributes the information to an unnamed source familiar with the matter.
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However, sources close to the transaction, told The Deal's Vipal Monga that the sale has not yet closed. According to his story, Deutsche Bank is "trying to sell parcels of debt at an average price of around 85% of par and is providing financing to the buyers of 3 times equity." Those same sources revealed Apollo Management LP and Blackstone Group LP to be the buyers the Frankfurt-based bank was working with.
With over $50 billion of committed leveraged debt on its balance sheet Deutsche Bank is taking a haircut on the sales to protect itself against further write-downs on the assets' value, a path similar to Citigroup Inc., which last week agreed to sell some $12 billion of loans and bonds to Apollo, Blackstone and TPG Capital at an average price of under 85% of par, according to sources.
Deutsche Bank and Citigroup are being forced to sell blocks of committed leveraged debt because they have been slower than other banks to do so. Bank of America Corp., Credit Suisse Group, Goldman, Sachs & Co. and Lehman Brothers Inc. have been aggressively selling their debt, piece by piece, since the end of last year, according to market sources. - George White
See story about Deutsche Bank debt sales from Reuters
See story about Deutsche Bank debt sales from TheDeal.com
See Dealscape post on debt sales
