Dresdner Bank sold roughly $600 million of its loan portfolio last Wednesday. Three dealers were invited to bid, but the winner of the auction could not be confirmed. The credits up for sale comprised five U.S. credits W.R. Grace & Co., NRG Energy, WKI Holding's World Kitchen, Mandalay Resort Group, and Wynn Resorts as well as a host of European names. The sale was said to be conducted via Dresdner's European desk rather than the bank's New York trading desk. Dresdner's total lending volume was EUR123.1 billion last year, but the amount allocated to corporate borrowers could not be determined.
The loans in the portfolio were priced anywhere from six cents on the dollar to par and the transaction was a collaborative effort between the par and distressed loan desks, said a market player. The transactions wrapped up a week long effort by dealers to line up buyers. One of the main responsibilities of Dresdner's recently established Institutional Restructuring Unit is to dispose of loans that are no longer a part of Dresdner's strategic orientation or are non-performing, according to Dresnder's annual report. The bank had to increase its net loan loss provisions from EUR1.9 billion in 2001 to EUR2.2 billion in 2002. Jan Kvarnström, ceo of Dresdner's Institutional Restructuring Unit, could not be reached by press time. A U.S. spokeswoman did not return calls.