Royal Bank of Scotland is to offload £1.4 bn (EUR 1.5 bn) of high-risk UK commercial property loans into a structure controlled by private equity group Blackstone, according to a news report in The Financial Times.

The deal - the largest UK commercial property debt disposal - has been structured in a complex form that will allow the state-owned bank to retain a share of future profits and will ensure it takes the smallest possible writedown.

According to the paper, Blackstone will buy a minority position but will assume the management of the portfolio, which includes performing but high loan-to-value debt with ratios of more than 90%. These loans require active management and working with borrowers on either restructuring or a sale of assets.

Lazard and Berwin Leighton Paisner advised the bank.