Wall Street lenders stuck with $1.6bn unsold loans

Bloomberg

A rout in the once-hot market for risky corporate loans has some of Wall Street’s largest banks stuck with at least $1.6 billion
of unwanted leveraged buyout debt.
Banks including Barclays Plc, Goldman Sachs Group Inc. and Bank of America Corp. — among the top providers of loans for LBOs — have struggled in recent weeks to sell loans they’ve agreed to make for private equity deals, as concerns about the global economic outlook spurred investors to flee risky assets.
At least four loan sales for buyouts and acquisitions have failed to clear the market so far this month, forcing the banks to keep the debt on their books, according to data compiled by Bloomberg and people familiar with the matter. The hope is that by waiting until next year to sell the debt to investors the banks might be able to avoid a fire sale. But holding
onto the loans could weigh on banks’ earnings in the fourth quarter.
The hung deals are equal to 14 percent of the $11.7 billion of loans sold in December, according to Bloomberg data. But they also represent a small fraction of the more than $2.3 trillion of loans to corporations that were on U.S banks’ books as of Dec. 12, according to Federal Reserve data.