RBS offloads €1.4 billion of leveraged loans to fund manager

Intermediate Capital Group has bought a portfolio of €1.4 billion in face value of leveraged loans from Royal Bank of Scotland. The firms did not say how much ICG will pay for the assets, which will go into its ICG European Fund 2006 and ICG Recovery Fund 2008. RBS says the sale is part of a plan to trim its balance sheet and off-load non-core assets.

ICG is funding the portfolio by creating a CLO comprising a €790.7 million class A series rated AAA by Fitch and Aaa by Moody's, and €49.5 million of AA/Aa2 class B notes, implying that the €571.8 million of unrated preferred and subordinated notes will be leveraged just 1.5 times. The CLO, which is known as ICG EOS Loan Fund I, has a two-year reinvestment period, according to Fitch.