U.S. private equity firm Lone Star said it had bought Lloyds Banking Group's
The deal was signed on Thursday morning, Lone Star, whose bid was backed by senior debt from Royal Bank of Canada
Project Royal comprised a portfolio of debt secured against commercial property that was worth about 700 million pounds.
We have continued 2010's momentum in deleveraging our corporate real estate loan book throughout 2011, despite what has been a significantly more challenging environment for property transactions, said Richard Dakin, head of Lloyds' corporate real estate, business support unit.
One source familiar with the matter confirmed that Lloyds did not have to provide vendor finance to secure the deal.
Two other sources with knowledge of the matter added Lone Star had secured the Project Royal portfolio at a discount of up to 40 percent less than its value.
We are confident of the ability of the Lone Star Funds to deliver constructive solutions to banks, said Angus Dodd, managing director of UK real estate, at Lone Star Management Europe.
As further deleveraging takes place in the property sector, the Lone Star Funds are well-placed to invest in further opportunities as and when they arise, Dodd said.
(Reporting by Andrew Macdonald; Editing by Helen Massy-Beresford)