Lloyds finalises shortlist for Project Hampton loan sale

Five expected to enter final phase for €1.5bn pan-European loanbook

Lloyds Banking Group has drawn up the shortlist for its €1.5bn, pan-European Project Hampton loanbook sale.

The list is thought to be: Apollo, Blackstone, Cerberus, Deutsche Bank and Lone Star, which are expected to go through to the binding bid phase next month.

Project Hampton is divided into three separate tranches and the bidders have the option to bid on all the loans or on the sub-pools. The largest tranche is mainly German and French loans, the second pool is Nordic loans and the smallest, Spanish.

There are 23 borrowers, including several European listed property trusts and funds that borrowed from HBOS at the top of the market.

The Matrix European Real Estate Investment Trust is now managed by Schroders, and Invista EREIT and the former Halverton German Retail Property fund by Internos. Valad is also a significant borrower.

Many of the loans are paying interest, but most mature in the next few months and some managers had tried and failed to either refinance or persuade Lloyds to keep rolling over the loans while assets were sold.

“Lloyds picked these because they didn’t want to have 23 refinancing negotiations,” said one borrower. Bidders eliminated in the first round are thought to include Oaktree, Starwood, Marathon, Macquarie Bank and Davidson Kempner. Deloitte is running the sales process.

Lloyds is also moving on with the sale of £200m Project East, a 39-strong hotel loan portfolio, and first-round bids were due last week. The portfolio includes several Holiday Inn Express hotels. The loans were issued to a range of borrowers; sources said that the portfolio could be sold at a discount of about 50% to face value. KPMG is advising.