PE Buyers Circle SocGen Property Loans

French bank Société Générale is selling property loans worth more than 600 million euros ($801 million) reports Reuters. The Financial Times said it believes SocGen has invited a range of companies including private equity groups like Blackstone, Carlyle, Lone Star and Oak Tree and Italian hedge fund Chenavar to bid for the loans, writes Reuters.

(Reuters) – French bank Société Générale is selling property loans worth more than 600 million euros ($801 million) as it seeks to slash its exposure to the volatile sector and withstand the euro debt crisis, according to a source close to the situation.

The sale, which was earlier reported by the FT, is part of the bank’s bid to cut debt and strengthen its balance sheet in the face of a crisis that has dried up access to funding markets, the source said.

“This is part of the deleveraging process,” the source said.

SocGen declined to comment.

The FT story said the lender expected to receive a number of bids for a portfolio of non-performing loans to shops and offices in France and Germany on Tuesday, with most bids coming from private equity buyers.

SocGen is expected to lose up to 50 percent of the original value of the loans, which have a face value of around 500 million euros and were made before the 2007 property market crash, the FT said.

The newspaper said it believed SocGen had invited a range of companies including private equity groups like Blackstone , Carlyle, Lone Star and Oak Tree and Italian hedge fund Chenavar to bid for the loans.

The FT also said it believed SocGen was marketing a portfolio of distressed loans worth about 100 million euros.

Private equity funds are the likely candidates to buy this set of loans made on commercial real estate assets in the U.S., according to the article, which also said it was not yet clear when the sale of this smaller group of loans would take place. ($1 = 0.7490 euros) (Reporting by Lionel Laurent in Paris and Michelle Martin in London; Editing by Hans-Juergen Peters)