ICG acquires €1.4bn loan portfolio from RBS

The bank will sell €1.4bn of European senior loans to London-listed ICG as part of a restructuring and divestment of non-core assets.

Alternative asset firm Intermediate Capital Group has acquired a loan portfolio with a par value of €1.4 billion from government-owned Royal Bank of Scotland.

The portfolio is largely made of European senior loans across a wide range of sectors, and includes “mostly Western European and triple-A companies we’ve now conducted diligence on for the past several months,” according to a spokesman for ICG.

Further financial terms were not disclosed.

The transaction, expected to close by the end of August, will be financed with both equity and debt. Equity for the investment will be provided by ICG alongside its funds ICG European Fund 2006 and ICG Recovery Fund 2008.

ICG will manage the portfolio alongside its other senior loan and high yield investment vehicles in its credit fund management division, which holds €4.7 billion of assets under management, according to a statement.

RBS will serve as sole arranger and lead manager on the transaction.  Debt providers for the transaction were not disclosed.

The deal was in line with RBS’s strategy of reducing its balance sheet and exposure to non-core divisions, the bank said.

The 83 percent government-owned bank has recently completed a number of divestments as part of a restructuring designed to shrink its balance sheet following its near-collapse during the financial crisis. Advent International and Bain Capital recently agreed to acquire the bank's card payment business, RBS WorldPay, for an enterprise value of up to £2.025 billion (€2.43 billion; $3.24 billion).

Founded in 1989, ICG has approximately €11 billion under management in proprietary capital and third party funds. In July, the group stated intentions to deploy £150 million to £200 million this year, investing cautiously “given the fragility of the economic recovery”.