The great leveraged debt sell-off continues. Royal Bank of Scotland plc, one of the biggest providers of leveraged debt to financial sponsors in the late, lamented private equity boom, is reportedly selling $8 billion in deeply discounted debt to Apollo Management LP and Blackstone Group LP's debt investing arm GSO Capital Partners LP.
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Neither RBS nor the buyers were immediately in a position to
comment, but a story in Monday's Financial Times suggested that the
loans would be in addition to the $5 billion of debt that GSO and
Apollo bought from RBS, Credit Suisse Group and Deutsche Bank AG to finance
the reworked buyout of Clear Channel Communications Inc. by Bain Capital LLC and Thomas H.
Lee Partners LP. The FT cited Blackstone's Tony James saying that the
buyers of such loans can make returns of up to 30% given the markdowns
on the sale prices, though it did not give any precise figures for the
discounts on RBS' disposals. - Jonathan Braude
See story from the Financial Times
See TheDeal.com: Tesco buys out RBS business (subscription required)
