Abbey National sells private equity loan book to GE Capital

Abbey National has announced the sale of its s700m leveraged loan book to the GE European Leveraged Finance division of GE Capital. The portfolio comprised 34 senior and mezzanine leveraged business loans, 33 of which were sponsored by private equity. It is understood that GE Capital paid close to par for the portfolio, which was managed by Abbey National Treasury Services plc. Private equity sponsors of the loans include prominent European and US players, such as Doughty Hanson, CVC, Cinven, KKR and EQT. The news comes at a time when many banks are reducing their direct exposure to the private equity asset class, whether on the equity side, such as HSBC and Deutsche Bank, or debt, such as WestLB. Abbey has been selling off non-core assets this year as part of its strategy to focus on mortgages and savings. John Foy, managing director at GE European Leveraged Finance, states that the group is keen to increase its private equity loan book. ‘We believe it’s a good time to buy, at the right stage of the cycle, and we are hungry to grow as rapidly as we can. GE is a big player in the US private equity market, and is keen to expand its presence in Europe.’ GE European Leveraged Finance is a part of GE Commercial Finance, and is part of the Global Sponsor Finance Group based in the US. Graham Randell is senior managing directorof GE European Leveraged Finance. The Group provides a range of integrated finance, including mezzanine, to support European leveraged finance transactions. Most latterly in the UK, the group underwrote half of the debt package to Firth Rixson’s public-to-private (13 January 2003, page 25). The Abbey National acquisition represents the single largest transaction made to date by GE’s leveraged finance team. Foy confirms that the group is currently in discussions to make two further such acquisitions.

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