LONDON, May 31 (Reuters) - Lloyds Banking Group islooking to sell an estimated $500 million tranche of itsshipping loans as it continues to shrink its non-core portfolio,trade finance sources said on Friday.
The bank declined to comment. It had about 7 billion pounds($10.7 billion) of shipping loans outstanding at the end ofMarch.
"Lloyds has been trying to sell off another portion of theirloan book and they have been trying to do it below the parapetusing specialists," one trade finance source said. "They aretaking a piecemeal approach to selling their overall loan book."
In October sources told Reuters Lloyds took a near 50percent loss on a $750 million portfolio of shipping loans itsold to U.S. private equity firm Oaktree Capital.
"The cleanest solution would have been for Lloyds to havesold (the whole portfolio) at 90 or 95 cents on the dollar andshut it down but nobody was offering them anything close tothat," said Basil Karatzas, chief executive of consultancy andbrokerage Karatzas Marine Advisors & Co. "Now they appear to beparcelling out the portfolio."