Leading private-equity firms are purchasing more leveraged buy-out loans from banks.
In the most recent deal, Royal Bank of Scotland is selling to Apollo, GSO Capital, Blackstoneā??s debt investing arm, and TPG as much as $8bn in loans that financed acquisitions by private-equity firms, people with knowledge of the deal said.
The buyers of the loans could make returns of up to 30 per cent, given the markdowns on the sale prices, said Tony James, president of Blackstone. Apollo and GSO also have bought $5bn of debt from RBS, Credit Suisse and Deutsche Bank that together financed the recently re-worked buy-out of Clear Channel, the US radio station owner, by Bain Capital and Thomas H Lee.
