A joint venture of the Blackstone Group and Morgan Stanley is purchasing a $1.25 billion portfolio of distressed Australian commercial real estate loans from Great Britain's Lloyds Banking Group for $604 million.
The New York Times reports that the transaction is part of the British bank's efforts to focus on domestic lending while jettisoning unsuccessful international holdings. Lloyds has received a bailout from the British government – which still owns a stake in the company – and it will use the funds from the transaction to pay off its debt.
‘This transaction is in line with the group's strategy of derisking its balance sheet and reducing its noncore assets,’ Lloyds said in a statement, adding that its Australian real estate portfolio lost approximately $285 million last year.
