* Germany's Commerzbank shedding real estate portfolios
* Lone Star, Wells Fargo in talks to buy U.K. loans-source
* Commerzbank, Wells Fargo, Lone Star decline comment
FRANKFURT, April 18 Private equity firm Lone
Star and Wells Fargo are in exclusive talks to buy a 4
billion pound ($6.09 billion) UK property loans portfolio, put
up for sale by Commerzbank, a person familiar with the
deal said on Thursday.
A deal could be struck as early as May, the source added.
Commerzbank, Wells Fargo and Lone Star declined to comment.
Germany's second-largest lender is selling the UK property
loans business of its mortgage unit Hypothekenbank Frankfurt
International, formerly known as Eurohypo as a way to cut down
the size of its balance sheet.
Wells Fargo & Co is interested in acquiring the performing
property loans, while distressed debt and equity investor Lone
Star Funds has its eyes on non-performing debt, the source said.
Commerzbank's move to sell property loans follows similar
steps by other troubled banks to shed risky assets. Allied Irish
Banks Plc and Anglo Irish Bank Corp Ltd
have also sold billions of dollars worth of property loans.
Shedding the assets will help Commerzbank, which received a
state bailout in the 2009 financial crisis, fulfil stricter bank
safety rules known as Basel III. Balance sheets with fewer risky
assets require less capital.
In a presentation to investors in February, Commerzbank said
its UK commercial real estate portfolio was the largest among
those classified as "higher risk" with an exposure at default of
around 5.2 billion euros ($6.8 billion).
In total, Hypothekenbank Frankfurt's exposure at default to
commercial real estate is around 56 billion euros and its
exposure to public finance is around 80 billion euros, a
presentation from September shows.
The Financial Times on Wednesday reported that other
prospective bidders including Blackstone, Apollo, Starwood
Capital and Pimco have been informed their bids will not be
$1 = 0.6564 British pounds)