GLOBAL - The German central bank has declined to confirm that it has sold 50% of the €1.8bn Excalibur property loan portfolio inherited from the Lehman Brothers collapse to US private equity firm Lone Star.

In a statement, it said disposal of the highly complex securities used as collateral by the bank was "not yet complete", but that it would not comment on ongoing business transactions.

According to US real estate information firm CoStar, the central bank and Lone Star had agreed the sale of half the Excalibur portfolio and were in exclusive talks over the acquisition of the other 50% by the end of February.

The portfolio comprises senior debt in pan-European commercial mortgage-backed securities Lehman Brothers Bankhaus (LBB) was unable to distribute before its parent bank collapsed.

It includes multi-sector exposure primarily to Germany, but also to Sweden, the UK, France, Finland and the Netherlands.

Excalibur - the Bundesbank's single largest remaining collateral item - was originally valued at €2.16bn.

The Bundesbank has since sold 28 of the portfolio's 33 securities.

The Bundesbank said: "Excalibur is a highly complex securitisation, which just a few large, financially strong and risk-taking investors worldwide would consider buying."

It added that, in normal economic circumstances, disposal of securities posted as collateral would have taken place within four weeks to minimise financial losses. In this case, the euro-zone monetary authority opted instead for gradual disposal.

The Bundesbank said: "It is in the general interest, and ultimately in the taxpayer's interest, to dispose of collateral such as Excalibur as optimally as possible under the given circumstances."

Lone Star did not respond to requests for comment before deadline.

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