UBS begins sale process for Lehman Japan loans

TOKYO (Reuters) - UBS AG (UBSN.VX) has begun the sale process for a portfolio of real estate loans extended by failed investment bank Lehman Brothers (LEHMQ.PK), sending out requests for confidentiality to potential investors, four people who saw the document said.

The Swiss bank UBS is acting as an adviser for the sale of the loans, which were extended by Lehman's Japanese real estate loan units Lehman Brothers Commercial Mortgage and Sunrise Finance. [nT69644]

The size of the portfolio has not been disclosed.

Potential buyers are expected by market players to include Wall Street bank Goldman Sachs (GS.N) and U.S. private equity firm Lone Star.

UBS sent out the request for confidentiality last week.

Lehman Brothers' Japanese unit, which filed for court protection from creditors in September, had provided loans backed by property to developers for offices, commercial facilities, condominiums and hotels.

In addition, Lehman had tied up with Japanese real estate developer Daito Trust Construction Co (1878.T) to extend loans to individuals to help them purchase apartment buildings for rent.

Nomura Holdings Inc (8604.T), which bought Lehman's operations in Asia, Europe and the Middle East, did not take any debt held by the failed U.S. bank.

(Reporting by Junko Fujita; Editing by Edwina Gibbs)